After breaking out in July, Opendoor Technologies (OPEN +1.82%) soared again in August, climbing on the thesis that the business would turn around on new signs that the Fed would cut interest rates. Investors also reacted positively to news that CEO Carrie Wheeler would be stepping down, showing hopes that a new leader could help drive a turnaround.
That general momentum was able to overcome a weak second-quarter earnings report, and the stock is now up nearly 1,000% since it bottomed out in early July.
According to data from S&P Global Market Intelligence, the stock jumped 142% over the course of the month. As the chart shows, it was a volatile month for Opendoor, but the upward movements clearly outnumbered the pullbacks.
Retail investors are still in
Toward the end of July, there were signs that the rally in the stock was fading after trading volume had soared earlier in a meme stock rally that seemed to begin with an argument on social media platforms like X and Reddit. Hedge fund manager Eric Jackson argued that the stock could be the next Carvana, since Opendoor was essentially left for dead as investors gave up on the home flipper's business model due to a weak housing market and disappointing financial results.
Opendoor stock got a second wind in August after a subpar unemployment report kicked off August, sending the stock higher on hopes that it would lead the Fed to cut interest rates. The stock then pulled back after its second-quarter earnings report showed the business is still struggling, and its guidance called for revenue to fall on a sequential basis in the third quarter. It began a new rally in the second week of the month as an inflation report added to hopes that the Fed would cut interest rates, and Wheeler announced her resignation.
Finally, Opendoor stock jumped nearly 40% on Aug. 22 after Fed Chair Jerome Powell signaled in his Jackson Hole address that it would be appropriate to cut interest rates in September. The stock pulled back over the rest of August, but jumped again to start September.
Image source: Getty Images.
Can Opendoor keep gaining?
It's been a remarkable rally for a stock that has now topped $5 a share, just two months after it was trading around $0.50 a share.
Opendoor is still a small company at a market cap of $3.8 billion, but at some point, the business will have to show real improvement. Still, for now, if interest rates do come down and the housing market starts to show signs of life, the stock is likely to move higher.
