Latest news with #SPAC
Fast Company
2 hours ago
- Business
- Fast Company
What is Opendoor? OPEN stock price soars as housing market platform becomes the latest meme stock
Watch out, AMC. There's a new meme stock on the market. Shares in Opendoor Technologies Inc. (Nasdaq: OPEN) have been on fire over the past week. Since Tuesday, July 15, OPEN stock has surged more than 188% as of Friday's market close. And today, OPEN's stock price is currently up an additional 27% in premarket trading. Here's why, and what you need to know about the company. What is Opendoor Technologies Inc? Opendoor is a real estate tech company based in San Francisco, California. It was founded in 2014. The company offers an online platform that allows homeowners to quickly sell their homes by providing details about the property. After the homeowners answer questions about their property, Opendoor will make them an offer to buy it directly. Once Opendoor purchases a home from a user, it will then often make necessary improvements to the home and then sell it to a buyer for a profit. In other words, Opendoor is a house-flipping company. It buys houses on the cheap, fixes them up, and flips them for a profit. Opendoor went public through a special purpose acquisition company (SPAC) in 2020, and it currently trades on the Nasdaq. What's the story behind OPEN's stock price? Less than a year after OPEN stock publicly debuted on the Nasdaq, its shares surged. OPEN's stock price went from around $11 per share in July 2020 to nearly $40 a share at one point in February 2021, according to data from Yahoo Finance. But since then, the stock has cratered. By the end of 2022, CNBC notes, OPEN shares had fallen 92% to just $1.16 each. Opendoor's stock price fell due to the company's business prospects, which got pummelled by rising interest rates, increasing Opendoor's borrowing costs. At the same time, rising interest rates led to a slowdown in the housing market, as demand for home buying slowed. Recently, OPEN shares had fallen below $1, putting the company at risk of removal from the Nasdaq. The threat of delisting has prompted the company to consider a reverse stock split of up to 1 for 50, aiming to boost its share price and thereby maintain its listing on the Nasdaq, according to CNBC. OPEN shares continued their steady decline until July of this year, when, on July 15, the stock price suddenly began to accelerate upwards. By Friday, July 18, the stock had surged more than 188% over the previous five-day period. What is causing OPEN stock to surge? The main driver behind OPEN's stock price surge over the past week seems to be down to one person, according to CNBC and Yahoo Finance. That person is hedge fund manager Eric Jackson. Jackson runs EMJCapital, but if you look at Jackson's X profile, you'll see he describes himself as 'The Carvana hedge fund guy. All he does is try to find the next Carvana over & over again.' He states this because he is the one who had the foresight to identify Carvana Co. (NYSE: CVNA) as a good buy when the stock price was trading in the single digits. In 2022, many investors thought Carvana was near bankruptcy, but Jackson was bullish on the stock. While CVNA hit a low of under $4 per share in December 2022, it surged more than 1,000% in 2023. And its great run has continued. On Friday, CVNA shares closed at almost $348, up nearly 170% for the year. Jackson was one of the few people to see the potential in Carvana when the stock was getting hammered in 2022. And now he seems to think he's found another stock with such potential in Opendoor. On July 14, Jackson began tweeting consistently about OPEN shares, arguing that 'it could be a 100-bagger over the next few years.' In a lengthy thread, Jackson said he was bullish on OPEN because it's giving his hedge fund '$CVNA vibes.' According to Jackson, some of the reasons for this are that next month, Opendoor is likely to report its first-ever positive EBITDA for a quarter. It has also cut costs aggressively and has few competitors left. Due to this and other reasons, Jackson argues that OPEN's stock price could rise to $82 per share within a few years. Since Jackson's July 14 posts—and his subsequent posts about OPEN—the stock's price has surged more than 188%. Is OPEN the new meme stock? People are already describing OPEN as the new meme stock. A 'meme stock' is the description given to a stock that becomes popular with retail investors on social media. Word of mouth spreads on social channels about the new 'hot' stock, and soon many traders with brokerage accounts buy shares in hopes of seeing massive gains in a short amount of time. GameStop Corp. (NYSE: GME) and AMC Entertainment Holdings, Inc. (NYSE: AMC) were historically two of the most popular meme stocks, and their prices surged during the pandemic as at-home retail investing saw a renaissance while people were under lockdowns. Given that many retail investors on social media are singing the praises of OPEN after Jackson's tweets, it does seem fair to say OPEN is the new meme stock of the moment. Of course, that doesn't make it a safe bet. Jackson lays out some compelling arguments for the stock's bright future. But in investing, nothing is ever guaranteed. And while Jackson, and plenty of others now, are bullish on OPEN, it's worth noting that there are voices out there arguing that the stock is not a buy.
Yahoo
2 days ago
- Business
- Yahoo
GrabAGun stock price declines after SPAC merger and listing on NYSE
GrabAGun Digital Holdings, an online firearms store backed by Donald Trump Jr., did not have the stock market debut that he and other shareholders had hoped for. Instead, its shares fell 23% Thursday on their first day of trading on the New York Stock Exchange (NYSE). This new tax deduction in Trump's 'big, beautiful bill' lets people cash in on charitable donations up to $2,000. Here's what to know These are the 3 best questions to ask at the end of your job interview Ikea is launching new smart home products, and they're designed to be extra easy to use The stock, which trades under the ticker PEW, was down again about 1.23% in premarket trading on Friday as of this writing. The president's eldest son had started Wednesday with a triumphant tone. Donald Trump Jr. rang the NYSE's opening bell as people chanted 'USA,' just one day after fellow shareholders had approved GrabAGun's merger with Colombier Acquisition Corp. II, a special purpose acquisition company, or SPAC. He was joined by the SPAC's CEO, Omeed Malik. Trump Jr., who owns 300,000 shares of GrabAGun, according to a filing with the Securities and Exchange Commission (SEC), trumpeted the market debut of a firm that trades in firearms. In an interview with Fox Business, he stated, 'To be able to come back to the New York Stock Exchange and actually take a gun company public feels like such a vindication of all the insanity, all of the 'woke' nonsense that we've been watching and facing for the last decade in America.' GrabAGun raised $179 million in gross proceeds from the merger, according to the company. Malik and Trump Jr. are both also connected to 1789 Capital, as president and a partner, respectively. The decision to merge with a SPAC is an interesting one. Markets experienced a SPAC boom during the early pandemic years, but their bubble has long since burst. In its place is a long list of failed SPAC mergers and—in some cases—lessons learned by companies like BuzzFeed, Virgin Galactic, and 23andMe. This post originally appeared at to get the Fast Company newsletter:
Yahoo
3 days ago
- Business
- Yahoo
Donald Trump Jr-Backed GrabAGun Just Started Trading. How Should You Play PEW Stock Here?
GrabAGun (PEW) went live on the New York Stock Exchange after completing its SPAC merger with Colombier Acquisition Corp. II that raised $179 million. Donald Trump Jr., who joined the board and owns a 1% stake in the online firearms retailer, rang the opening bell. More News from Barchart Insider Trading Alert: Here's Who Bought Nvidia and AMD Stock Before the U.S. Chip Deal with China Peter Thiel Is Betting Big on This Ethereum Treasury Stock. Should You Buy Shares Now? New Reports Call UnitedHealth's Earnings Momentum Into Question. How Should You Play UNH Stock Here? Markets move fast. Keep up by reading our FREE midday Barchart Brief newsletter for exclusive charts, analysis, and headlines. However, the celebratory mood didn't quite translate to investor enthusiasm, with PEW shares losing as much as 20% on July 17. This follows a similarly sizable plunge on Wednesday, July 16. What the Disappointing Debut Means for GrabAGun Stock A sharp decline in a firm's share price on day one is rarely a good omen, and GrabAGun stock is hardly any different. Despite significant revenues and high-profile backing, PEW shares closed significantly below their opening price on Thursday, signaling investor skepticism. SPAC deals often face scrutiny over valuation and long-term viability, and GrabAGun's politically charged branding may have added volatility. While the company claims profitability and a sizable addressable market, the poor debut suggests investors are cautious – either about regulatory risks, competitive pressures, or the sustainability of its growth story. For now, the market seems convinced that GrabAGun's narrative doesn't even begin to justify its current valuation. Why PEW Shares Remain Highly Speculative to Own PEW stock remains unattractive despite a notable pullback on Thursday as it sits right at the intersection of politics and SPAC volatility. GrabAGun operates in a heavily regulated industry, and any shifts in federal or state gun law could impact its business rather significantly. While Trump Jr.'s involvement may attract attention, it also polarizes sentiment, making the stock much more vulnerable to political cycles. SPAC-backed firms often lack the transparency and institutional coverage that conventional IPOs enjoy, leaving retail investors exposed. In short, without a clear roadmap for scaling or diversifying revenue, the SPAC stock remains a speculative play at best rather than a stable investment. On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on
Yahoo
3 days ago
- Business
- Yahoo
Opendoor Explodes 175% After Hedge Fund Shoutout--But Is a Crash Coming Next?
Opendoor Technologies (NASDAQ:OPEN) just pulled off one of the wildest comebacks of the year. After a rough stretch that saw the stock down over 50% in 2024, it's suddenly up more than 175% this week alonefueled by a burst of retail speculation and a timely endorsement from hedge fund manager Eric Jackson. Jackson, who runs Toronto-based EMJ Capital, took to social media last week to call attention to Opendoor's leaner cost structure and push for profitability. That was enough to ignite the crowd. By Friday afternoon, the stock had spiked as much as 39%, setting the stage for its biggest weekly gain ever. Warning! GuruFocus has detected 6 Warning Signs with OPEN. The numbers behind the move are staggering. Roughly 340 million shares traded hands on Fridaymore than three times the typical volume. Short interest? About 24% of the free float, according to S3 Partners. That's high enough to spark a classic short squeeze. Options traders swarmed in too, driving call volumes to record highs and pushing implied volatility sharply higher. But not everyone's betting on more upsideput option activity jumped late Friday, hinting that some are positioning for a reversal after this parabolic run. Opendoor, which went public via SPAC in 2020, had largely fallen off the radar since its pandemic-era boom. But this week's action is a reminder: in a market still shaped by the post-Gamestop playbook, heavily shorted names can explode with the right mix of narrative, volume, and social media fuel. Whether this rally has legsor ends in a sharp reversalremains to be seen. For now, Opendoor is back in the spotlight. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
CNBC
3 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."
