Opendoor Technologies (OPEN -14.68%) stock suffered a big sell-off in Wednesday's trading. The company's share price fell 14.7% in the daily session and had been down as much as 15.7%. For comparison, the S&P 500 and the Nasdaq Composite each gained 0.2% today.
Big swings for the stock have been the norm lately, and there don't appear to have been any business-specific catalysts behind Opendoor's big valuation pullback today. To put the volatility in perspective, Opendoor's share price had actually been up as much as 5.7% in today's trading before the gains withered and reversed into deep sell-off territory.
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Opendoor stock retreats in another volatile trading day
Opendoor stock has been hugely volatile in recent months and is actually still up roughly 152% year to date despite some big sell-offs over the last couple of days. The stock's big rally was partially spurred by vocal votes of bullish confidence from EMJ Capital founder and CEO Eric Jackson.
From there, Opendoor stock saw additional gains connected to meme stock trading and news that CEO Carrie Wheeler had stepped down from her post. Developments for the real estate market and outlook on interest rates have also factored into the company's gains, but there's clearly a lot of speculative investing at play here. While a surge of interest from retail traders has helped power big gains for the stock, meme trading on the stock opens the door for big downside volatility -- and that appears to be what played out today.
What's next for Opendoor?
With today's pullback, Opendoor now has a market capitalization of roughly $3 billion and is valued at approximately 73% of this year's expected sales. Its stock is also still down roughly 89% from its lifetime high.
While the stock could see more explosive gains in conjunction with support from retail investors or new institutional players, the company carries a high debt load and has yet to achieve profitability. I certainly wouldn't bet against Opendoor with a short position right now, but the business's fundamentals suggest the stock is a very risky play.
