Opendoor (OPEN) Stock Jumps 16% After Record Low: What Sparked the Bounce?

TLDR

• Opendoor (OPEN) closed up 16% at $2.31 on Thursday after hitting a record low of $1.93.
• A sharp drop in Treasury yields and a new 2% down co-ownership program helped fuel the rebound.
• The stock fell 49% in the third quarter, from $4.62 to $2.37, and is down 66% year to date.
• Hedge funds cut their holdings from $315 million to $156.2 million, and the count fell from 39 to 36.
• The Fed meeting later this month and earnings in early November are the next catalysts.

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Opendoor (OPEN) stock closed up 16% at $2.31 on Thursday. It had jumped as much as 21% during the session to $2.34. That move came a day after the stock dipped below $2.00.

Opendoor Technologies Inc., OPEN

At its lowest point, the stock hit a record low of $1.93. Buyers stepped in quickly after that. The stock is still down about 66% so far this year, and its market cap sits near $2.05 billion.

What Drove the Bounce

Treasury yields fell sharply on Thursday. It was their largest daily drop since last year. Lower yields tend to make real estate look better to investors.

Fears over AI buildout borrowing also played a part. Those worries came as tech stocks sold off. Money moved into Treasuries, and yields dropped.

Company news helped too. CEO Kaz Nejatian publicly defended Opendoor’s business model. He has been vocal as the stock slid.

Opendoor also rolled out a new 2% down co-ownership program. It aims to ease housing affordability concerns. Traders appeared to like the timing.

Some investors are pointing to better business trends. Home acquisitions and revenue have been rising. That suggests demand for Opendoor’s services is growing.

Higher volumes and AI-driven efficiency could help spread costs over time. That could move the company closer to profit. Still, ongoing losses and negative cash flow remain risks.

A Rough Quarter for the Stock

The stock had a hard third quarter. It fell 48.7% from $4.62 on June 30 to $2.37 at the end of September. That was far worse than the 14% drop in the second quarter and the 19.7% drop in the first.

Several factors weighed on it. They include higher interest rates, a slow housing market and weak consumer confidence. Doubts about the company’s turnaround also played a role.

Big investors have pulled back as well. In the second quarter, 36 hedge funds held the stock, down from 39 in the first quarter. Their combined holdings fell to $156.2 million from $315 million.

Traders have labeled it a meme stock, which adds to the swings. Average trading volume is about 41 million shares. TipRanks lists its technical sentiment signal as “Sell.”

The Federal Reserve meets later this month. Economists are split on what the central bank will do and say about future rates. The decision is expected to move the stock in the coming weeks.

Opendoor reports earnings in the first week of November. For the third quarter, the company is targeting revenue growth of 10% to 15% year over year. It also expects better margins and velocity.