OPEN: Stock Frenzy Stalls as Opendoor Retreats — While $39M Algo Claims Still Cloud Outlook

Court: D. Arizona

Case: 2:22-cv-01717

After soaring more than 40% on Monday, Opendoor’s wild ride took a hit Tuesday as the stock’s early 24% jump evaporated, prompting a trading halt and reviving questions about its long-term fundamentals.

Key Developments and Analyst Highlights

• OPEN surged 24% early Tuesday before falling back, ending the session near flat after a temporary trading halt.
• Stock tripled in value last week amid buzz on WallStreetBets and Stocktwits.
• Opendoor was flagged as the most traded retail stock early Tuesday, driven by social media-fueled retail activity.
• EMJ Capital’s Eric Jackson predicted OPEN could be a “100-bagger,” triggering retail momentum.
• Opendoor narrowly escaped Nasdaq delisting in May for trading under $1 for 30 consecutive days.

Timeline Overview

• September 19, 2022: Bloomberg reports Opendoor lost money on 42% of home flips in August.
• Losses reached 55% in Los Angeles and 76% in Phoenix transactions.
• Analysts warned that September data could be even worse.

Allegations Include

• Misleading investors about the algorithm’s ability to predict housing prices.
• Overstating margins and the firm’s viability in a declining real estate market.
• Failing to warn about vulnerabilities in its iBuying platform during volatile cycles.

Investor Update

• A $39 million cash settlement has been reached to resolve shareholder claims.
• The stock has plummeted over 80% from its $31.25 post-SPAC peak in December 2020.
• Investors remain cautious as algorithmic trust and profitability remain in question.

You can check more information about it and file for a payout HERE.