After surging through July and August, Opendoor Technologies (OPEN 1.25%) clocked another winning month in September.
The online home flipper, which caught fire as a meme stock back in July, continued to gain last month as it brought in a new CEO and two of its co-founders rejoined the board, showing real changes are afoot at the company. Additionally, the stock benefited from the Federal Reserve's first interest rate cut of the year and its forecast of two more cuts, as lower rates should bring down mortgage rates, bringing new life back to the housing market.
According to data from S&P Global Market Intelligence, the stock finished the month up 79%. As you can see from the chart below, it was a wild month for Opendoor, which skyrocketed on the CEO news before giving up some of those gains later in the month.
The Opendoor surge continues
At one point during September, Opendoor was up more than 2,000% from where it was just a few months earlier, a dramatic gain in a stock that had been left for dead until an argument that it could be the next Carvana gained steam.
The major news last month that drove the stock higher, up 79.5% in just one session on Sept. 11, was that it named Kaz Nejatian, who was COO of Shopify at the time, as its new CEO. At the same time, the company also brought back co-founders Eric Wu and Keith Rabois to join the board, with Rabois becoming chair.
The move ignited a rally because investors have been agitating for new leadership. The board pushed out former CEO Carrie Wheeler last month, but it was unclear who would replace her as the permanent CEO. Rabois called Nejatian the only choice for the job, and the former Shopify exec seems to have a good pedigree for the role, having run a consumer-facing digital platform at Shopify and injecting it with AI.
Image source: Getty Images.
What's next for Opendoor
The volatility in Opendoor seems to have cooled off in recent days. There's been no major news or movement in either direction on the stock.
Investors may be adopting a wait-and-see approach. Nejatian has talked up a lot of new products, and investors are eager to see what they are and if they'll have an impact.
Opendoor had given disappointing guidance for the third quarter, so investors shouldn't expect a sudden turnaround. Fixing the business won't be easy, but if mortgage rates fall, Opendoor could get a much-needed tailwind as housing market activity picks up.
