Shares of Opendoor Technologies (OPEN 4.33%) are moving higher on Friday, up 2.2% as of 1:56 p.m. ET, but were up as much as 15.5% earlier in the day. The jump comes as the S&P 500 has lost 0.7% and the Nasdaq Composite has lost 1.3%.
Though most of the gain didn't stick, the meme stock flew upward following the appearance of EMJ Capital's Eric Jackson on Yahoo! Finance's show "Opening Bid."
Eric Jackson once again sends Opendoor stock higher
Mr. Jackson is largely responsible for initiating Opendoor's rally this year, propelling it to become one of the hottest meme stocks on the market. He's been a strong proponent of the stock, believing that the company is sitting on a gold mine of data that it can use to effectively leverage AI, becoming the go-to way to buy and sell your home.
Appearing on Yahoo! Finance, Jackson made a strong connection that sent shares flying. The investor said, "If you think about some of the great e-commerce brands that have emerged in the last 10 years, I'm thinking of names like Uber, kind of revolutionizing how you take a taxi. I'm thinking of Airbnb revolutionizing how we think about, you know, going and staying in a B&B."
Image source: Getty Images.
The comparison is more complicated than Jackson makes it out to be
This comparison is exciting, but I think it's oversold. While Opendoor could provide a platform to buy and sell that becomes ubiquitous, like Airbnb, Opendoor's business model includes buying and selling real estate itself, which makes it incredibly capital-intensive -- very unlike Airbnb or Uber.
That also makes it extremely sensitive to interest rates and the general direction of the housing market, which does not look great right now. The company is currently unprofitable and heavily reliant on debt. I would avoid this stock.
