Yesterday was a big day for Opendoor Technologies (OPEN 2.04%) stock. Shares of the online real estate platform skyrocketed 80% yesterday after it named a new CEO. Retail investors have been rallying behind Opendoor, turning it into the latest meme stock.
Today, though, investors are booking those gains. Co-founder and new chairman Keith Rabois squashed some of the excitement surrounding the stock in a CNBC interview this morning. Shares had plunged by 15.4% at 1:17 p.m. ET.
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Is Opendoor bloated and broken?
Rabois and co-founder Eric Wu were brought back to the board of directors yesterday after Kaz Nejatian, formerly chief operating officer of Shopify, was appointed CEO. Today, Rabois said of the company's 1,400-member workforce, "I don't know what most of them do." He stressed that a headcount reduction would be coming as more than 200 current employees aren't needed, in his opinion.
Rabois called the workforce "bloated" from the ability to work remotely. He added this:
The culture was broken. These people were working remotely. That doesn't work. This company was founded on the principle of innovation and working together in person. We're going to return to our roots.
Rabois also contended that Opendoor was not, as many investors claim, a meme stock. Shares have rocketed more than 1,300% in the last three months behind retail trader support.
NASDAQ: OPEN
Key Data Points
Rather, he said the retail movement in stocks is healthy as consumers, not professional money managers, are deciding what stocks to support.
That's bound to be a controversial point of view. Investors who own Opendoor for the momentum of a meme stock might be dumping shares today. That's probably a smart move, too. Eventually, business fundamentals will win out. A turnaround in the housing sector might be what saves Opendoor's currently unprofitable business, but that remains to be seen.
