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

Meno di 1 minuto di lettura

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.
But $39M Algo Claims Still Cloud Outlook

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.