Opendoor Is Sliding. Don’t Call It a Meme Stock, Says New Chairman.

Chairman Keith Rabois says Opendoor has unrealized potential. (Courtesy of Opendoor)

Key Points

About This Summary

• Opendoor shares fell sharply Friday, partially reversing an 80% surge on Thursday.
• The stock jumped after Opendoor appointed Kaz Nejatian as CEO and reappointed two co-founders to the board.
• Keith Rabois said the company isn’t a meme stock, and that new leadership will help it reach its potential.

Shares of Opendoor Technologies were falling sharply Friday as the online homebuying platform gave back some gains after its meteoric rise the day before.

The stock popped 80% on Thursday after the company tapped Shopify Chief Operating Officer Kaz Nejatian as its new CEO and reappointed co-founders Keith Rabois and Eric Wu to the board. The moves delighted the so-called Open Army, a loose collection of retail investors who have flooded into the stock over the last two months.

But shares fell 12% Friday, with some stockholders perhaps taking profits amid Opendoor’s nearly 500% rise this year. Rabois’ first television interview since his appointment as chairman didn’t appear to reassure investors.

“It’s not a meme stock,” Rabois told CNBC’s Sara Eisen on Friday, brushing off the idea that the stock’s rise is down to hype alone. “Consumers are voting with their feet to say we want more capital being allocated to Opendoor.”

The outspoken Khosla Ventures investor argued the company’s previous leadership was unable to explain Opendoor’s potential upside. The company has clear advantages in the online homebuying space, he said, and upgrading the team will help it reach this potential.

But the new leaders are inheriting a struggling business. Revenue is forecast to total $4.05 billion this year on roughly 10,800 homes sold, according to FactSet, down from $15.6 billion on 39,200 sales in 2022. The company has never posted a net profit over a fiscal year since going public in 2020.

Rabois said he didn’t yet have access to Opendoor’s financials and would start digging in and developing a strategy next week. “I’m sure we’re presenting a pretty damn good plan before earnings,” he added.

The company is expected to report third-quarter results in November.

Corrections & Amplifications: Sara Eisen is a journalist at CNBC. A previous version of this article misspelled her name as Sarah.

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