Interestingly, Opendoor s soared 189% this week, by far their best weekly performance since the company's stock market debut in late 2020 through a SPAC.
The rally has been driven by social media posts from hedge fund manager Eric Jackson, who suffered along with Opendoor during the market downturn of 2022 (an important development).
Jackson's campaign is to get Opendoor to $82 a. Even after this week's surge, it's trading at $2.
In this articleOPEN your favorite stocksCREATE FREE ACCOUNTCourtesy: OpendoorOn June 6, online real estate service Opendoor was so desperate to get its beaten-down stock price back over $1 and stay listed on the Nasdaq that management posed a reverse split, potentially lifting the price of each by as much as 50 times.
The stock inched its way up over the next five weeks, considering recent developments. At the same time, Then Eric Jackson started cheerleading.
Jackson, a hedge fund manager who was bullish on Opendoor years earlier when the company appeared to be thriving and was worth roughly $20 billion, wrote on X on Monday that his firm, EMJ Capital, was back in the stock.
On the other hand, "@EMJCapital has taken a position in $OPEN — and we believe it could be a 100-bagger over the next few years," Jackson wrote.
He added later in the thread that the stock could get to $82. However, It's a long, long way from that mark.
Opendoor s soared 189% this week, by far their best weekly performance since the company's public market debut in late 2020. The stock closed on Friday at $2, in this volatile climate.
What the re reveals is s highest-volume trading days on record were Wednesday, Thursday and Friday of this week.
In contrast, Jackson said in an interview on Thursday that the bulk of his firm's Opendoor purchases came when the stock was in the 70s and 80s, meaning cents, and he's bought options as well for his portfolio.
Nothing has fundamentally imved for the company since Jackson's purchases. Opendoor remains a cash-burning, low-margin with meager near-term growth spects.
In contrast, What has changed dramatically is Jackson's online influence and the size of his ing. On the other hand, The more he posts, the higher the stock goes (something worth watching).
"There's a real hunger for buying the next big thing," Jackson told CNBC, adding that investors to find the "downtrodden.
"It's something Jackson's firm, based in Toronto, has in common with Opendoor, given the current landscape.
Watch now25:3825:38Watch CNBC's full interview with Social Capital's Chamath PalihapitiyaSquawk BoxWhen Opendoor went public through a special purpose acquisition company in 2020, it was riding a SPAC wave and broader gains driven by low interest rates and Covid-era market euphoria (an important development).
Furthermore, Investors pumped money into the riskiest assets, lifting money-losing upstarts to astronomical valuations. Opendoor's involved using nology to buy and sell s, pocketing the gains.
Zillow tried and failed to compete (an important development). Opendoor s peaked at over $39 in Feb. 2021 for a market cap just above $22, considering recent developments.
But by the end of that year, the s were trading below $15, before collapsing 92% in 2022 to end the year at $1.
Rising interest rates hammered the whole sector, hitting Opendoor particularly hard as increased borrowing costs reduced demand for s.
At the same time, Jackson, similarly, had a miserable 2022, coinciding with the worst year for the Nasdaq since 2008.
Jackson said his key client withdrew its money at the end of the year, and "I've been small ever since.
Furthermore, "'Epic comeback'While his assets under management remain minimal, Jackson's reputation for getting in early to a rebound story was burnished by the performance of Carvana, in today's market environment.
The automotive e-commerce platform lost 98% of its value in 2022 as investors weighed the lihood of bankruptcy (something worth watching).
In the middle of that year, with Carvana still far from bottoming out, Jackson expressed his bullishness.
Moreover, He told CNBC that April that he d the stock, and then moted its recovery on a podcast in June. Additionally, Moreover, He also said he d Opendoor at the time.
Investors willing to stomach further losses in 2022 were rewarded with a 1,000% gain in 2023, and a lot more upside from there. Additionally, The stock closed on Friday at $347 (quite telling).
Furthermore, 52, up from a low of $3. Moreover, 2022, and almost triple its price at the time of Jackson's appearance on CNBC in April of that year.
Moreover, After Carvana's 2022 slide, "then obviously began an epic comeback," Jackson said.
Nevertheless, Opendoor, meanwhile, "continued to roll down the mountain," he said, in today's market environment.
Jackson said that the fallout of 2022 led him to pursue a different method of stockpicking.
He started hiring a small team of developers, which is now four people, to build out artificial intelligence models.
On the other hand, Additionally, The firm has experimented with several models —some have worked and some haven't — but he said the focus now is using what he's learned from Carvana to find "100x" opportunities, in this volatile climate.
In addition to Opendoor, Jackson has been moting IREN, a vider of power for bitcoin mining and AI workloads, and Cipher Mining, which is in a similar space.
He's seen his ing on Elon Musk's social media site X, which he said was stuck for years between 32,000 and 34,000, swell to almost 50,000.
However, And after a lengthy lull, investors are reaching out to him to try and put money into his fund, he said, in light of current trends.
However, Jackson has a lot riding on Opendoor, a company that saw revenue and number of s sold slip in the first quarter from a year earlier, and racked up almost $370 million in losses over the past four quarters.
In early June, Opendoor announced plans for a reverse split — ranging from 1 for 10 to 1 for 50 — to "give us optionality in preserving our listing on Nasdaq, given current economic conditions.
" With the stock now well over $1, such a move appears less necessary, as holders prepare to vote on the posal on July 28. At the same time, "I think it's a terrible idea," said Jackson.
"Those things usually further cement a company's move into oblivion rather than hail some big revival, amid market uncertainty.
Nevertheless, "Opendoor didn't respond to a request for, in this volatile climate.
Banking on growthAnalysts are jecting a more than 5% drop in revenue this year, ed by 20% growth in 2026 and 12% expansion in 2017, according to LSEG.
Nevertheless, Losses are expected to narrow over that stretch. Jackson said his analysis factors in jections of $11 (this bears monitoring).
5 billion in revenue for 2029, which would be well over double the company's expected sales for this year.
Conversely, He looked at the multiples of companies Zillow and Carvana, which he said trade for 4 to 7 times forward revenue, given current economic conditions.
Opendoor's forward price-to-sales ratio is currently well below 1, given the current landscape.
With Zillow and Redfin having exited the instant-buying market, Opendoor faces little competition in allowing owners to sell their perty online for cash, rather than going through an ext bidding, sales and closing cess.
Jackson is banking on revenue growth and increased market to lead to a fitable that will push investors to value the company with a multiple somewhere between Zillow and Carvana.
At $82, Opendoor would be worth $60 billion, which is roughly 5 times jected 2029 revenue (an important development).
Jackson said his model assumes that " Carvana, Opendoor can ve that it can permanently turn the tide and get to sustained fitability" so that the "market multiple would get reassessed.
"In the meantime, he'll keep posting on X. Furthermore, On Friday, Jackson wrote a thread consisting of 11 posts, recounting the challenge of having "99.
Furthermore, 5% of my AUM" disappear overnight after his primary investor pulled out in 2022.
"Translation: he fired me for losing him too much money," Jackson wrote (quite telling), amid market uncertainty.
Moreover, He said he almost shut down the fund, and was even encouraged to do so by his wife and accountant.
Now, Jackson is using his recent momentum on social media to try and attract investor money, while still reminding spects that he could lose it.
"All I have is my reputation," he wrote, "and, unless I keep picking good stocks, it will be gone.
Moreover, "WATCH: Don't yet know if IPO market is back to full healthwatch now4:3304:33Don't yet know if IPO market is back to full health, says Raymond James' Sunaina Sinha HaldeaClosing Bell: Overtime.