Opendoor Technologies is attempting to build a sustainably profitable business around house flipping.
So far, the company hasn’t been able to turn a profit.
A new CEO is promising that AI can change both the cost and execution equation.
Share prices of Opendoor Technologies (NASDAQ: OPEN) have risen a shocking 400% so far in 2025. Most of that gain has come in just the last couple of months, which has been a time of massive change for the company.
One of the biggest changes is a new CEO who has been talking up the opportunity of using artificial intelligence (AI) to improve Opendoor’s business.
From a big-picture perspective, Opendoor Technologies is a home flipper. It basically offers home sellers a low-ball bid that comes with quick execution and alleviates the need to invest in home improvements prior to the sale.
If a deal is made, Opendoor puts in the time and capital investment necessary to spruce up the property and then lists it for a higher price than it bought it for. The hope is that all of the homes Opendoor buys can be turned around quickly and cost-effectively, creating a wide spread between the cost of the home (including carrying it through the renovation period) and the price at which Opendoor sells it.
This is a business model that’s usually done locally by small investors. Often, the small investor does the renovation work themselves to keep costs low.
Home flipping can be very profitable, but it hasn’t been replicated on a large scale. Notably, Opendoor’s income statement has yet to see a full-year profit, and the stock has fallen dramatically from its all-time highs just a few years ago. The early excitement wore off as investors realized that the company was really just a money-losing start-up.
The mood around Opendoor shifted dramatically in the last few months after an activist investor got involved and effectively pushed out the CEO. Just recently, it was announced that Kaz Nejatian, a former Shopify executive, was taking over as CEO of Opendoor. As a result, the stock rocketed higher.
Opendoor’s business is highly reliant on technology when it comes to selecting homes. The new CEO is planning to lean into artificial intelligence, with the goal of cutting costs (including firing employees) and making stronger homebuying/home-selling choices.
If Nejatian is correct, Opendoor’s business could finally break into the black and, perhaps, be expanded beyond the limited number of markets in which it currently operates. There is a significant potential opportunity available to tap into here.
profitable business, Opendoor
#Stock #Brand #CEO #Climbing