Real estate stock Opendoor Technologies (OPEN +3.17%) caught some meme magic earlier this year when retail investors on WallStreetBets, the sub-Reddit that played a large role in driving GameStop to astronomical levels in 2021, noticed that short interest had surged past 20%. This made the stock a prime candidate for a short squeeze.
Opendoor's stock went from less than $0.60 per share in June to $7.25 (as of Dec. 2), and at one point earlier this year had reached roughly $10.50 per share. Hedge fund manager Eric Jackson played a significant role in the stock's surge, stating that it has the potential to reach $82 per share.
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Opendoor is an online platform that allows people to quickly sell their homes to the company, primarily through a digital process that eliminates many of the middlemen involved in the traditional homebuying process. The company then looks to resell the homes at a profit.
While Opendoor has been on an incredible run, here's one reason the stock is yesterday's news.
The push has come and gone
One reason I believe Opendoor is yesterday's news is that the big meme stock push has come and gone, and now there is less buzz in general about the company, which is critical for meme stocks. There are also more meme stocks than when the craze started in 2021, and there always seems to be a new one on the horizon. For instance, Beyond Meat is another stock that appears to have captured the meme spotlight, with its stock recently up more than 51%.
I also believe that many of Opendoor's major catalysts have already occurred, so the company will need to execute operationally to continue driving the stock higher.
For instance, the company named Kaz Nejatian, a former Shopify executive, as the new CEO in September and also appointed Opendoor's Co-Founder, Keith Rabois, as chairman of the company's board of directors. This news sent the stock to all-time highs.
NASDAQ: OPEN
Key Data Points
Perhaps new management can turn the company around. Nejatian recently unveiled a new strategic plan that includes scaling home acquisitions and capturing more market share, enhancing unit economics and resale velocity, and building operational leverage. More interest rate cuts that stimulate homebuying and selling activity could also help, but right now the company is still losing money and saw revenue decline significantly year over year.
Ultimately, Opendoor is no longer as prevalent in the broader business media, and other meme stocks are likely to pop up, which is why I think the company is yesterday's news.
