Opendoor's CEO Sprung a Big Trap for Short Sellers. Should You Buy?

"What began as a near-death experience for the online home-flipping platform - trading as a penny stock amid a brutal housing market downturn - transformed into one of the year's biggest rallies. Shares have skyrocketed nearly 900% in the past six months, fueled by retail investor enthusiasm, social media campaigns, and a leadership shakeup that brought fresh optimism. High short interest, exceeding 22% of the float, made it a prime target for squeezes."

"Opendoor's journey in 2025 started grimly enough. Shares dipped below $1 early on, prompting fears of delisting and even talks of a reverse stock split. The iBuying model - buying homes directly from sellers for quick resales - faced headwinds from persistently high interest rates and slow housing turnover. Opendoor's fundamentals reflected this: third-quarter results showed year-over-year drops in homes bought and sold, along with lower contribution margins."

"Yet the tide turned in the middle of the year when influential investors highlighted Opendoor's potential as the surviving leader in digital real estate. Speculation grew around its vast data trove powering artificial intelligence (AI) tools for pricing and transactions. Retail crowds piled in, turning it into a classic meme play. The appointment of a new CEO in September - bringing in a tech veteran focused on software innovation - added additional fuel, pushing shares up thousands of percent from summer lows."

Opendoor transformed from a penny-stock near-failure to one of 2025's biggest rallies, with shares rising nearly 900% in six months driven by retail traders, social-media campaigns, and high short interest above 22% of the float. The core iBuying business continued to suffer from high interest rates, slow housing turnover, falling homes bought and sold, lower contribution margins, and persistent losses. Shares earlier dipped below $1 amid delisting fears. A new CEO, Kaz Nejatian, pursued software and AI-focused initiatives and aggressive actions against short sellers, which amplified speculative demand and investor optimism.

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