Opendoor Stock Jumps Another 15% as Retail Piles in on Potential 100x Rally in "Next Few Years"

Opendoor shares jumped another 15% in morning trading on Friday.

Opendoor Technologies stock has exploded higher in recent weeks, rising another 10.8% on Thursday to bring its one-month gains to nearly 200%. Retail enthusiasm and a thesis from investor Eric Jackson have powered a surge in the long-dormant housing play.

Opendoor, the leader in iBuyer real estate technology, went public via a SPAC in December 2020. The stock reached an all-time high closing high of $39.24 on Feb. 11, 2021. Within two years, shares were under $1.

Jackson, the president and founder of tech-focused long/short investing hedge fund EMJ Capital who was also early to call for a turnaround at Carvana, posted a thread to X on July 14 outlining his Opendoor thesis, citing several tailwinds and concluding that "we believe it could be a 100-bagger over the next few years." The stock has roughly doubled since those comments, closing at $1.65 on Thursday.

"I think it just shows how mispriced the stock has been over the last, I don't know, year and a bit," Jackson told Yahoo Finance on Thursday. "The valuation was so off that if people did start to change their opinions, this thing could move a lot, not just double or triple or quadruple."

And retail traders seem to have piled into the trade since Jackson made his views public.

In the past 24 hours, at least a dozen posts citing bullish options plays on Opendoor were posted to the r/WallStreetBets Reddit page, a hub for speculative derivatives trading, that have cumulatively garnered more than 2,000 comments.

Part of Jackson's thesis is that the company faces no true competition now that Zillow and Redfin have exited the iBuyer game.

iBuyer technology uses algorithms to help companies buy homes from owners for cash, make light repairs, then flip them back onto the open market to hopefully resell at a profit. The strategy once had buy-in from some of the real estate industry's biggest names, but real estate giants Zillow and Redfin announced in 2021 and 2022, respectively, that they were getting out of the iBuyer space and returning to their core offerings.

To Jackson, this makes Opendoor similar to a bet on Coinbase before the collapse of FTX.

"You had to make a bet on 'is crypto truly dead?' in the way that probably the majority of people were thinking at the time, or, if it does come back, how is that going to play out with Coinbase being one of the only national names in town," Jackson said.

FTX went under in December 2022. Coinbase stock closed at around $34 in early 2023. Today, Coinbase shares trade north of $400.

When Opendoor reports earnings on Aug. 5, Jackson predicts the company will show its first quarter of positive EBITDA. He also agrees with analyst consensus estimates that Opendoor is likely to print revenue of $11.6 billion in FY 2029. In fiscal 2024, Opendoor's revenue tallied $5.2 billion.

Offerpad Solutions, often cited as Opendoor's biggest competitor in the iBuyer space, has also seen its shares surge recently. However, Jackson told Yahoo Finance that Offerpad lacks the scale to compete nationally in the long term with Opendoor.

Instead, he sees Opendoor as likely to be the dominant player in iBuying over the long run.

"Everybody is a prisoner of the moment and just thinks like market rates are going to be high forever, the housing market is going to suck forever," Jackson said.

"Things change, market rates drop, suddenly there is a frenzy of buying — and if those macro things happen, Opendoor is in a perfect position for it," he added.