Shares of Opendoor Technologies (OPEN -9.17%) have resumed their rally after a brief pause last month. The stock jumped as much as 12.3% this morning and remained higher by 4.8% as of 12:05 p.m. ET. Opendoor has become the latest meme stock as retail investors continue to push it higher.
That jump comes despite a recent Securities and Exchange Commission (SEC) filing showing that one large shareholder is cashing in on the rally.
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A meme stock bonanza
Opendoor's business has been struggling. The online real estate company has been a victim of a sluggish housing market. Its stock bottomed out in June at $0.51 per share. Then retail investors stepped in and sparked a huge rally. Short-covering accelerated it in July, and shares have skyrocketed over 800% since then.
Amid the meme stock euphoria, there was mounting pressure from investors for the underlying business to execute a turnaround. Former CEO Carrie Wheeler announced her decision to resign in mid-August. Wheeler posted about her decision on social media, stating: "The last weeks of intense outside interest in Opendoor have come at a time when the company needs to stay focused and charging ahead. I believe the best thing I can do for Opendoor now is to accelerate my succession plans that I shared with the Board mid-year and make room for new leadership to take the reins."
A new SEC filing shows that Wheeler has now sold 7 million shares worth almost $35 million. That's about half of her total stake, and it was worth only about $3.5 million as recently as late June.
Sometimes, large shareholder sales can help push the stock down. But there are enough retail buyers to keep the rally going today. Wheeler's 7 million shares represent slightly less than 1% of Opendoor's total shares outstanding.
With the housing market still slumping, and considering the extraordinary rise in the stock in recent weeks, investors might be smart to follow Wheeler to take profits.
