Latest news with #Covid-era
CNBC
7 hours ago
- Business
- CNBC
Opendoor leads meme stock redux on Wall Street with shares tripling in one week
Opendoor Technologies, a penny stock last week, attracted sudden interest among Reddit-obsessed retail traders, who pushed up the stock price by threefold in days. The online real estate startup saw shares popping more than 22% in premarket trading Tuesday, set to extend a red-hot run powered by retail traders chasing meme stocks. It had surged more than 42% in Monday's session with trading halted multiple times due to volatility. The stock, which had been trading mostly under $1 this year, hit a high of $4.97 during Monday's session and closed the day at $3.21 apiece. Its meteoric rally pushed the stock up by more than 500% in July alone. The ticker $OPEN has been heavily cited on WallStreetBets, the online forum behind the infamous GameStop mania in 2021. It gained traction on the internet partly after hedge fund manager Eric Jackson, an investor in Opendoor, started touting the stock, saying it can reach $82 a share. "HODLTHE($OPEN)DOOR," one post reads. Trading volumes exploded with 1.9 billion of Opendoor shares exchanging hands on Monday, more than 1,700% of the three-month average, according to FactSet. About 22% of Opendoor's available shares are sold short, meaning short-covering could be at play during this run. Short sellers tend to buy back shares to cut their losses when their short target rallies suddenly, and their buying can further push up the stock. Heightened options trading in the name also intensified the rally. Bespoke Investment Group called Opendoor a "poster-child" for the recent wave of options market optimism. "That stock is up 500% in three weeks; total call open interest has tripled over that time period, Bespoke said in a note to clients. "Surges in call buying are driving extreme moves higher for a small slice of the market, even as most other stocks drop." When Opendoor went public through a special purpose acquisition company in 2020, it was riding a SPAC wave and broader gains driven by low interest rates and Covid-era market euphoria. Opendoor's business involved using technology to buy and sell homes, pocketing the gains.
Time of India
a day ago
- Business
- Time of India
How Sam Altman replaced Elon Musk: From calling Donald Trump "unfit to be President and a threat to US national security" to becoming his go-to man for AI
OpenAI CEO Sam Altman has emerged as President Trump's primary AI advisor after strategically outmaneuvering rival Elon Musk , marking a dramatic reversal from his previous harsh criticism of the president. Altman, who once compared Trump to Hitler and called him "an unprecedented threat to America," now enjoys regular White House access and influence over crucial AI policy decisions, according to The Wall Street Journal. The transformation culminated in June when Altman dined with Trump at his New Jersey golf club, with the president introducing him as "a very brilliant man" to applauding members. This warm reception contrasts sharply with Altman's earlier exclusion from Mar-a-Lago meetings and relegation to the inauguration overflow room rather than the main stage with fellow tech CEOs. Altman's strategic pivot pays off as Musk relationship deteriorates Altman's rise coincided with Musk's spectacular departure from Trump's inner circle in May, following disagreements over the president's "Big Beautiful Bill" spending legislation. The Tesla CEO's public criticism escalated into what the BBC described as "a vicious public spat" where Trump threatened to "put DOGE on Elon" and suggested the billionaire might need to "head back home to South Africa". Altman capitalized on this opening by quietly building relationships through influential MAGA lobbyist Jeff Miller and Trump campaign adviser Chris LaCivita, while securing backing from Oracle co-founder Larry Ellison, the Journal reported. His $1 million inauguration donation helped secure access, leading to the high-profile announcement of the $500 billion Stargate AI infrastructure partnership. Political transformation from Democrat to Trump ally The OpenAI chief's political evolution has been striking. In 2016, he endorsed Hillary Clinton and wrote that " Donald Trump represents an unprecedented threat to America," comparing Trump's tactics to Hitler's Big Lie strategy, ABC News reported. He donated $200,000 to Joe Biden's 2024 reelection campaign and praised Democratic supporter Reid Hoffman for preventing Trump's 2020 reelection. Altman's shift began during the Biden administration when he grew disillusioned with Democratic economic and AI policies. He warned government contacts that Covid-era stimulus would cause inflation and considered the CHIPS Act's $50 billion semiconductor investment "laughably small," according to the Wall Street Journal. The Biden administration's chip export restrictions also thwarted his plans to build AI infrastructure in the Middle East. By July 2024, Altman posted on X that he was "no longer a Democrat," explaining the party had moved so far left it left him "politically homeless." He later acknowledged that "watching [Trump] more carefully recently has really changed my perspective on him," telling associates he regretted his harsh earlier criticism. Democratic senators Elizabeth Warren and Michael Bennet recently sent Altman a letter questioning whether his Trump donation was meant to "curry favor and skirt the rules." AI infrastructure agenda drives new alliance Altman's strategy focused on appealing to Trump's builder background and competitive nature, framing OpenAI as the AI leader while advocating for massive government investment in AI infrastructure to compete with China. In June 2024, OpenAI executives met Trump in Las Vegas, demonstrating their then-unreleased Sora video generator and making the case for sweeping aside environmental reviews to accelerate development. The approach resonated immediately. Days later, Trump told podcaster Logan Paul that America needed to "take the lead over China" in AI, noting that "China will produce it because they'll do whatever you have to do, whereas we have environmental impact people." By the Republican National Convention, AI infrastructure became part of Trump's platform. This alignment succeeded where Musk's confrontational style failed, positioning Altman as the administration's key AI partner as Trump prepares to unveil his AI action plan later this month, the Journal reported. AI Masterclass for Students. Upskill Young Ones Today!– Join Now
NZ Herald
2 days ago
- Business
- NZ Herald
Mortgage rates drop, but further relief unlikely as OCR stabilises
At 5.1%, unemployment is the highest since 2016 (excluding the Covid-era) and it's expected to increase a little further before stabilising. This level of labour market slack usually keeps a lid on domestic inflation pressures. The RBNZ isn't done with cutting rates just yet, but an important insight borrowers should take from last week's decision is that we are nearing the end of the easing cycle. Of the big four Australian banks and Kiwibank, forecasts for where the OCR troughs range from 2.50% to 3%. The most recent RBNZ projections imply a floor of either 3% or 2.75%, with the odds slightly tilted towards the latter. Whoever you choose to believe, it's clear the bottom is getting closer. For most of us, this matters because of what it means for borrowing costs and the household budget. Mortgage rates have already fallen a long way. The two-year rate is 5% right now, down from 7% at the end of 2023. It's important to understand that your mortgage rate isn't driven solely by moves in the OCR. Global economic conditions, wholesale interest rates, bank funding costs and competition among lenders can also have a big influence. There's still a strong relationship though, especially for the shorter mortgage terms. In the past six months the gap between the OCR and the two-year rate has been about 1.5%, well below the average since 2017 of 2.2%. That tight spread could mean there's less room for mortgage rates to fall, even if we do see another OCR cut or three. The outlook could change if we experienced a global economic shock, or if inflation proved more persistent than expected. However, right now, the base case points to limited further relief. As our biggest lender, ANZ likely has some useful insights about the mortgage market. Its latest monthly property report suggests the two-year mortgage rate will bottom at 4.9% later this year, only marginally below current levels. It has the one-year slightly lower at 4.7%, while the three- and five-year rates don't dip below 5% in its projections. This conservative outlook is notable, given ANZ (with Kiwibank) sees the OCR falling to 2.50%. The upshot here is that most of the downward move in mortgage rates is behind us. I wouldn't say this is 'as good as it gets' for borrowers, but we're much closer to that point than many think. The next OCR decision is due in late August and importantly, this one will also see the release of a new forecast set. This is the natural opportunity for the next cut, but there are a few things to monitor between now and then. Next week's June quarter consumer price index (CPI) report is one, while the labour force report on August 7 will also be crucial. Assuming those are close to RBNZ projections, there's a decent chance we see a 0.25% cut at that time. That would take the OCR to 3%, close to neutral and where it sat comfortably for six years from 2010 to 2015. The focus will then shift to whether that's as low as it goes this cycle. With mortgage spreads already compressed relative to recent years and the OCR within neutral territory, borrowers hoping for much lower rates will be left disappointed. Mark Lister is Investment Director at Craigs Investment Partners. The information in this article is provided for information only, is intended to be general in nature, and does not take into account your financial situation, objectives, goals, or risk tolerance. Before making any investment decision Craigs Investment Partners recommends you contact an investment adviser.
CNBC
4 days ago
- Business
- CNBC
The investor behind Opendoor's 190% run nearly shut down his fund
On June 6, online real estate service Opendoor was so desperate to get its beaten-down stock price back over $1 and stay listed on the Nasdaq that management proposed a reverse split, potentially lifting the price of each share by as much as 50 times. The stock inched its way up over the next five weeks. Then Eric Jackson started cheerleading. Jackson, a hedge fund manager who was bullish on Opendoor years earlier when the company appeared to be thriving and was worth roughly $20 billion, wrote on X on Monday that his firm, EMJ Capital, was back in the stock. "@EMJCapital has taken a position in $OPEN — and we believe it could be a 100-bagger over the next few years," Jackson wrote. He added later in the thread that the stock could get to $82. It's a long, long way from that mark. Opendoor shares soared 189% this week, by far their best weekly performance since the company's public market debut in late 2020. The stock closed on Friday at $2.25. The stock's highest-volume trading days on record were Wednesday, Thursday and Friday of this week. Jackson said in an interview on Thursday that the bulk of his firm's Opendoor purchases came when the stock was in the 70s and 80s, meaning cents, and he's bought options as well for his portfolio. Nothing has fundamentally improved for the company since Jackson's purchases. Opendoor remains a cash-burning, low-margin business with meager near-term growth prospects. What has changed dramatically is Jackson's online influence and the size of his following. The more he posts, the higher the stock goes. "There's a real hunger for buying the next big thing," Jackson told CNBC, adding that investors like to find the "downtrodden." It's something Jackson's firm, based in Toronto, has in common with Opendoor. When Opendoor went public through a special purpose acquisition company in 2020, it was riding a SPAC wave and broader gains driven by low interest rates and Covid-era market euphoria. Investors pumped money into the riskiest assets, lifting money-losing tech upstarts to astronomical valuations. Opendoor's business involved using technology to buy and sell homes, pocketing the gains. Zillow tried and failed to compete. Opendoor shares peaked at over $39 in Feb. 2021 for a market cap just above $22.5 billion. But by the end of that year, the shares were trading below $15, before collapsing 92% in 2022 to end the year at $1.16. Rising interest rates hammered the whole tech sector, hitting Opendoor particularly hard as increased borrowing costs reduced demand for homes. Jackson, similarly, had a miserable 2022, coinciding with the worst year for the Nasdaq since 2008. Jackson said his key client withdrew its money at the end of the year, and "I've been small ever since." While his assets under management remain minimal, Jackson's reputation for getting in early to a rebound story was burnished by the performance of Carvana. The automotive e-commerce platform lost 98% of its value in 2022 as investors weighed the likelihood of bankruptcy. In the middle of that year, with Carvana still far from bottoming out, Jackson expressed his bullishness. He told CNBC that April that he liked the stock, and then promoted its recovery on a podcast in June. He also said he liked Opendoor at the time. Investors willing to stomach further losses in 2022 were rewarded with a 1,000% gain in 2023, and a lot more upside from there. The stock closed on Friday at $347.52, up from a low of $3.72 in Dec. 2022, and almost triple its price at the time of Jackson's appearance on CNBC in April of that year. After Carvana's 2022 slide, "then obviously began an epic comeback," Jackson said. Opendoor, meanwhile, "continued to roll down the mountain," he said. Jackson said that the fallout of 2022 led him to pursue a different method of stockpicking. He started hiring a small team of developers, which is now four people, to build out artificial intelligence models. The firm has experimented with several models —some have worked and some haven't — but he said the focus now is using what he's learned from Carvana to find "100x" opportunities. In addition to Opendoor, Jackson has been promoting IREN, a provider of power for bitcoin mining and AI workloads, and Cipher Mining, which is in a similar space. He's seen his following on Elon Musk's social media site X, which he said was stuck for years between 32,000 and 34,000, swell to almost 50,000. And after a lengthy lull, investors are reaching out to him to try and put money into his fund, he said. Jackson has a lot riding on Opendoor, a company that saw revenue and number of homes sold slip in the first quarter from a year earlier, and racked up almost $370 million in losses over the past four quarters. In early June, Opendoor announced plans for a reverse split — ranging from 1 for 10 to 1 for 50 — to "give us optionality in preserving our listing on Nasdaq." With the stock now well over $1, such a move appears less necessary, as shareholders prepare to vote on the proposal on July 28. "I think it's a terrible idea," said Jackson. "Those things usually further cement a company's move into oblivion rather than hail some big revival." Opendoor didn't respond to a request for comment. Analysts are projecting a more than 5% drop in revenue this year, followed by 20% growth in 2026 and 12% expansion in 2017, according to LSEG. Losses are expected to narrow over that stretch. Jackson said his analysis factors in projections of $11.5 billion in revenue for 2029, which would be well over double the company's expected sales for this year. He looked at the multiples of companies like Zillow and Carvana, which he said trade for 4 to 7 times forward revenue. Opendoor's forward price-to-sales ratio is currently well below 1. With Zillow and Redfin having exited the instant-buying home market, Opendoor faces little competition in allowing homeowners to sell their property online for cash, rather than going through an extended bidding, sales and closing process. Jackson is banking on revenue growth and increased market share to lead to a profitable business that will push investors to value the company with a multiple somewhere between Zillow and Carvana. At $82, Opendoor would be worth about $60 billion, which is roughly 5 times projected 2029 revenue. Jackson said his model assumes that "like Carvana, Opendoor can prove that it can permanently turn the tide and get to sustained profitability" so that the "market multiple would get reassessed." In the meantime, he'll keep posting on X. On Friday, Jackson wrote a thread consisting of 11 posts, recounting the challenge of having "99.5% of my AUM" disappear overnight after his primary investor pulled out in 2022. "Translation: he fired me for losing him too much money," Jackson wrote. He said he almost shut down the fund, and was even encouraged to do so by his wife and accountant. Now, Jackson is using his recent momentum on social media to try and attract investor money, while still reminding prospects that he could lose it. "All I have is my reputation," he wrote, "and, unless I keep picking good stocks, it will be gone."
Business Times
4 days ago
- Business
- Business Times
China venture capital funds tap global investors for US$2 billion in comeback
[BEIJING] China's largest venture capital houses are tapping the market for at least US$2 billion in new funds, re-engaging with the country's startups in a signal of renewed global investor interest in areas from AI to toys. At least six of the country's most prominent VC firms are creating new US dollar-denominated funds, designed to allow overseas investors to pool bets on Chinese companies. LightSpeed China Partners, known for backing Meituan and PDD Holdings in their early days, is targeting at least US$400 million for a fund focusing on deep tech, according to people familiar with the matter. Monolith Management, which backs DeepSeek-rival MoonShot AI, is looking to start a second fund of at least US$265 million, according to people familiar, who asked not to be named because the matter is private. Pop Mart International Group-backer BA Capital is raising another US$150 million, the people said. Ince Capital, co-founded by former Qiming managing partner JP Gan, is seeking US$200 million, the people said. They join Qiming Venture Capital, which began raising an US$800 million fund earlier this year, Bloomberg News has reported. Together, they represent a wave of fundraising that has not been seen among Chinese VCs for years. It's unfolding as global investors reassess the country's startup landscape and broader economy, which are showing signs of revival after years of Covid-era stagnation and regulatory headwinds. Much of that resurgent interest can be traced to the rise of breakout AI stars like DeepSeek and Manus, which has galvanised local entrepreneurs. At the same time, brands such as Laopu Gold and Pop Mart – maker of the wildly popular Labubu collectibles – are winning both consumers and financiers. The pace of fundraising remains a far cry from the industry's peak, before China's 2020 Internet sector crackdown. Investors remain wary about the long-term outlook of the country, while US endowments have retreated due to troubles at home and concerns about geopolitical tensions with China, the people said. Washington remains extremely sensitive in particular to sectors like semiconductors and AI. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up The fundraising plans are preliminary and subject to change, the people said. Representatives for LightSpeed China, Monolith, BA Capital and Ince did not provide comment on their fundraising. In public markets, Hong Kong has emerged as one of the world's busiest listing destinations this year, hosting US$33 billion worth of share sales from bubble tea chains and toy brands to electric vehicle suppliers. Candidates waiting in the wings include some of China's hottest large-language model makers and fashion giant Shein. That IPO surge is mirrored to some extent in private markets. Global sovereign wealth investors managing US$27 trillion in assets are increasingly bullish on China's tech sector because they do not want to miss out on the next waves of innovation, according to an annual survey by Invesco Asset Management. And more US investors including Benchmark and Capital Group have made exploratory trips to China in 2025. LightSpeed China, founded by James Mi, a former deals chief for Google's Asia operation, is one of several high-profile venture firms that helped seed China's modern tech industry. Monolith, co-founded by Tim Wang and HSG (Sequoia China) alum Cao Xi, has attracted enough interest to likely meet or surpass their target, the people said. The firm is deliberating a final target size. It closed a debut US-dollar fund at US$264 million in 2023, according to trade publication AVCJ. Cao is known for his early bets on Kuaishou Technology, Douyu International Holdings and Tencent Music. Other Chinese venture outfits considering raising funds this year include Xiaomi co-founder Lei Jun's Shunwei Capital, the people said. It's not immediately clear how much they may target. Source Code Capital, among the earliest backers of TikTok owner ByteDance, has also been seeking about US$150 million, people familiar said in February. Representatives for Shunwei did not provide comment on their fundraising. BLOOMBERG
