NEW YORK, NY / ACCESSWIRE / September 21, 2022 / Faruqi & Faruqi, LLP, a leading national securities law firm, is investigating potential claims against Opendoor Technologies, Inc. ("Opendoor" or the "Company") (NASDAQ:OPEN).
If you suffered losses exceeding $50,000 investing in Opendoor stock or options and would like to discuss your legal rights, call Faruqi & Faruqi partner Josh Wilson directly at 877-247-4292 or 212-983-9330 (Ext. 1310). You may also click here for additional information: www.faruqilaw.com/OPEN.
There is no cost or obligation to you.
Faruqi & Faruqi is a leading minority and Woman-owned national securities law firm with offices in New York, Pennsylvania, California and Georgia.
On August 4, 2022, after the markets closed, the Chief Executive Officer (Eric Wu) and Chief Financial Officer (Carrie Wheeler) of Opendoor issued a letter ("August 4 Letter") to shareholders indicating that "the housing market has moved rapidly in response to the Fed's aggressive rate hikes in an effort to curb inflation. This resulted in a steep increase in mortgage rates, which in turn catalyzed a slowdown in the rate of home transactions and lower levels of home price appreciation from all-time highs early in the year."
The August 4 Letter, however, reassured Opendoor shareholders that "[o]ur investments in our platform have enabled an agile and low cost operating system that allows us to scale up and down gracefully across seasons and cycles," and "[w]e are ready and well-positioned with our responsive pricing strategies, flexible operating model, low cost structure, and strong balance sheet to navigate near-term volatility and invest in the future of our platform."
On a conference call after the markets closed on August 4, 2022, Ms. Wheeler reassured an analyst that even in the current volatile market "our systems are doing exactly what they're designed to do, which is responding very, very quickly, adjusting prices to market and we've been raising spreads and new acquisitions."
On August 5, 2022, OPEN shares jumped 21.7% to close at $5.72 per share.
On September 19, 2022, however, Bloomberg cited industry data indicating that Opendoor had lost money on 42% of its transactions in August 2022 (as measured by the prices at which it bought and sold properties). Bloomberg reported that the data was even worse in key markets such as Los Angeles, where Opendoor lost money on 55% of sales, and Phoenix, where it lost money on 76% of sales.
Further, Mike DelPrete, a global real estate tech strategist, predicted in an interview that, based on his analyses, September is likely to be even worse for Opendoor than August. "Opendoor's metrics are in the danger zone," DelPrete stated. "They are very close to where Zillow was in its worst moments."
In November 2021, Zillow had shut down its own iBuying unit after its algorithms consistently and significantly underestimated market changes.
After the Bloomberg report, OPEN stock dropped 4.43% to close at $3.88 on September 19, 2022. On September 20, 2022, OPEN stock fell another 8.25% to close at $3.56.
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SOURCE: Faruqi & Faruqi, LLP