Opendoor Stock Rockets Another 34% After Soaring 188% Last Week. Here's the Reason

Opendoor stock rose over 34% in premarket trading.

Digital real estate platform Opendoor Technologies has recently exploded in popularity among retail investors, as its stock has jumped by 188% over the past week. The surge came after a bullish X post on July 14 by Eric Jackson, the head of EMJ Capital and an early Carvana bull, who shared a turnaround thesis for the struggling company and placed a long-term price target of $82 per share. Since that post, trading activity in Opendoor shares has soared by 140% compared to the previous month, according to VandaTrack.

Although Jackson isn’t officially launching an activist campaign, he told Yahoo Finance that there are potential strategic changes that, if announced, could send the stock soaring. Opendoor’s business model uses iBuyer technology (online platforms that purchase homes directly from sellers) to purchase homes for cash, make small repairs, and flip them for profit. However, rising interest rates and a slowing housing market hurt sales and added pressure to its debt-heavy model, which caused it to struggle.

Indeed, after spending over a month trading at under $1 per share, Opendoor received a Nasdaq delisting warning in May. Then, in June, it agreed to pay $39 million to settle a lawsuit from investors who claimed that its pricing algorithms couldn’t keep up with market changes. Nevertheless, Jackson expects the company to report its first positive EBITDA in August and praised its new approach of partnering with brokers instead of competing with them. In addition, with rivals like Zillow and Redfin exiting the iBuyer space, Opendoor now faces little direct competition, which gives investors hope that it could pull off a Carvana-style comeback.