Another meme stock may be stealing its glory.
Shares of Opendoor Technologies (OPEN -5.67%) were trading lower for the second day in a row today after hedge fund manager Eric Jackson seemed to prompt a rotation to Better Home & Finance after naming it as his next 100-bagger pick yesterday on X.
Opendoor, which had gained more than 2,000% over the last three months on a meme stock rally, continued to give up those gains and was down 10.9% as of 10:22 a.m. ET. Better Home & Finance, on the other hand, was up 27.5% at the same time.
Image source: Getty Images.
Is the Opendoor rally fading?
Jackson has been the unofficial leader of the Opendoor meme stock surge, originally setting it off with the argument that Opendoor could be the next Carvana, as the online used-car dealer has jumped more than 100 times since avoiding bankruptcy nearly three years ago.
Opendoor’s surge over the last three months shows that that argument has resonated, and the rally even helped usher in a leadership change. However, the fundamentals of Opendoor’s business haven’t changed, and at some point, that will matter.
While falling mortgage rates should favor the company, that won’t make it profitable by itself.
What’s next for Opendoor?
Since stepping into the CEO chair last week, Kaz Nejatian has been tirelessly promoting the company on social media and touting changes it’s made.
Opendoor expanded its product to all 50 states, up from just 50 markets previously, and Nejatian said on X last night that the company has an exciting product coming out in the next week.
Changes are afoot at Opendoor, but it will take time for them to have an impact on the business. There are still good reasons to doubt the online home flipper’s business model, but investors clearly want to see disruption from Nejatian.