The pandemic darling Opendoor has plunged in price since its IPO.
However, the stock price has surged over 100% in price in recent trading sessions.
Retail traders are piling in after a hedge fund manager announced a bullish position.
A hedge fund manager’s X post, eager retail investors, and some good old-fashioned r/WallStreetBets due diligence have created the perfect recipe for a new meme stock this week.
Opendoor stock has soared 90% in the last five days, with shares of the company now trading at $1.73.
The move is an unexpected reversal for the online home flipper, which went public via a Chamath Palihapitiya SPAC back in 2020 and has largely been discarded by Wall Street as a languishing penny stock.
Once valued at a market cap of over $15 billion and a peak stock price of $35, shares fell from grace post-pandemic as the housing market cooled and the company experienced inventory write-downs. It’s yet to post an annual profit since going public.
Just two months ago, the company received a warning from Nasdaq that it could be delisted after the stock price failed to break above $1 for 30 consecutive days. In June, Opendoor announced a special meeting for later this month to discuss a reverse stock split in the order of 1‑for‑10 or as much as 1‑for‑50 in order to boost the value of its outstanding shares.
A main driver behind Opendoor’s recent rally was a recent X post from EMJ Capital founder Eric Jackson, in which he detailed his firm’s position and investment thesis for the stock, as well as an $82 price target.
The Canadian hedge fund manager is confident that Opendoor is a deep value turnaround company, with the potential to grow revenues from roughly $5 billion in 2024 to $12 billion by 2029.
Jackson cited Opendoor’s cost cutting efforts and market leadership, as well as potential rate cuts as positive catalysts for the stock. He also called for management reforms within the company and better operational execution.
In Jackson’s view, the stock has the potential to become a “100-bagger,” returning over 1,000%.
Eric Jackson, stock price, Opendoor, reverse stock split, hedge fund manager, retail investors, penny stock, outstanding shares
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