Opendoor Stock Soars 80% as Co-Founders Return. Why the ‘Open Army’ Is Snapping Up Shares.

The online homebuying platform has become the market’s latest meme stock. (Courtesy Opendoor)

Key Points

About This Summary

• Opendoor Technologies appoints Kaz Nejatian, Shopify’s operating chief, as its new CEO and reappoints co-founders Keith Rabois and Eric Wu to the board.
• Shares of Opendoor surged 80% following the announcement.
• The moves are celebrated by retail investors, who had called for the previous CEO’s resignation and the return of Rabois.

Opendoor Technologies has named Shopify Chief Operating Officer Kaz Nejatian as its new CEO and reappointed co-founders Keith Rabois and Eric Wu to the board.

Opendoor shares soared 80% to $10.52 on Thursday, its largest single-day percentage increase on record and its highest close since Feb. 24, 2022, according to Dow Jones Market Data. Shopify stock rose 2%.

Nejatian, who is trained as an attorney, has been a Shopify executive since 2019, primarily leading the e-commerce platform’s product- management work. He also founded and led the payment-technology startup Kash. Wu and Rabois, meanwhile, return to the online homebuying platform they founded in 2013.

Rabois, an outspoken venture capital investor at Khosla Ventures, will serve as chairman. Wu was Opendoor CEO until 2022. As part of the appointments, Opendoor also entered into securities purchase agreements with Khosla Ventures and Wu for them to invest $40 million of equity capital into the company.

The moves appeared to have delighted members of the so-called Open Army, a loose collection of retail investors who have turned Opendoor into a fast-rising meme stock. The group had called for former CEO Carrie Wheeler’s ouster before she resigned last month, clamoring for the return of Rabois, who himself was sharply critical of the previous leadership.

Loading tweet…

Board directors Glenn Solomon and Pueo Keffer, both targets of the Open Army, stepped down in the reshuffle.

Opendoor stock has skyrocketed since the retail investing frenzy began in mid-July, with shares rising more than 1,000% over the last two months. Shares briefly traded above $30 apiece after Opendoor went public in late 2020, but the stock cratered over the next few years as the housing market stagnated.

The company is now going into “founder mode” under Nejatian and the reorganized board, touting the new chief executive as “the right leader for the AI era.”

“Literally there was only one choice for the job: Kaz,” Rabois said in a statement. “He is a proven executive with a founder’s brain. He is the right leader to unlock Opendoor’s unique data and assets as we build on Opendoor’s original mission, now enhanced as an AI-first company.”

Nejatian faces an uphill battle. As a public company, Opendoor has never posted a net profit over a fiscal year, and analysts polled by FactSet project losses of $234 million this year and $208 million in 2026. Revenue, meanwhile, is projected to total $4.05 billion this year, down from $15.6 billion in 2022.

Nejatian will receive up to $30 million worth of cash and restricted stock to compensate for his forfeited pay from Shopify, according to a Securities and Exchange Commission filing. Beyond that, his compensation is almost entirely incentive-based.

The new chief executive has a nominal salary of $1 and is ineligible for annual bonuses, but will receive two equity awards that could total up to 81.8 million shares of common stock depending on Opendoor’s average stock price over time.

Nejatian is a “solid” choice for CEO and Rabois and Wu will “bring new energy to Opendoor’s board,” wrote a Keefe, Bruyette & Woods team of analysts led by Ryan Tomasello. “All that said, we believe the path forward for Opendoor remains very uncertain—a turnaround at the company will be a heavy lift that, at a minimum, will take time to play out.” The analysts rate the stock Underperform with a price target of $1.

Shaina Mishkin contributed to this article.

Write to Nate Wolf at nate.wolf@barrons.com