Meme stock craze sends Opendoor shares soaring beyond 75 % in retail trader rally

Opendoor Technologies Inc. (OPEN), a San Francisco-based real estate tech firm, has seen its stock soar in recent days amid a meme stock craze, with shares climbing as much as 115% in recent trades. In total, Opendoor's stock has surged over 160% in the past month, driven primarily by speculative trading activity on platforms like Reddit's WallStreetBets, as reported by Yahoo Finance.

Founded in 2014, Opendoor utilizes iBuyer technology to streamline home sales. Homeowners use the company's platform to quickly sell their properties, with Opendoor providing a cash offer that enables easy sales. Once purchased, Opendoor makes light renovations and flips the homes for profit, explained Fast Company.

The remarkable increase in Opendoor's stock is partly attributed to the endorsement by Eric Jackson, a hedge fund manager known for spotting turnaround stories like Carvana. Jackson highlighted the potential for Opendoor to achieve positive EBITDA in upcoming quarters, as noted by Yahoo Finance. Despite the surge, the stock still trades considerably below its all-time high, and the company's short interest remains high, suggesting continued investor skepticism.

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Opendoor has also grappled with significant challenges. Rising interest rates have impacted its business model, leading to increased borrowing costs and a slowdown in real estate activity. This, coupled with a class-action lawsuit settlement in June, painted a challenging backdrop for the company, as reported by The Motley Fool.

In response to potential Nasdaq delisting threats due to low share prices, Opendoor has considered a reverse stock split to bolster its standing. While the recent stock upswing provides a short-term reprieve, the company's long-term viability remains under close scrutiny from investors.