One of the world’s newest so-called meme stocks is having a very bad day today. Shares in Opendoor Technologies (Nasdaq: OPEN) are currently slumping more than 20% in premarket trading. Here’s what you need to know.
Opendoor reports its Q2 2025 results
Yesterday, Opendoor announced second-quarter results for its fiscal 2025. Here’s what Opendoor reported:
- Revenue of $1.6 billion
- Gross profit of $128 million
- Net loss of $29 million
The company also revealed that it had an inventory balance of 4,538 homes with a total value of $1.5 billion. Additionally, it said that during the quarter, it purchased 1,757 homes, which was down 51% from the previous quarter and down 63% from the same quarter a year earlier.
For its current Q3, Opendoor issued revenue guidance of $800 million to $875 million.
But unfortunately for the company’s shareholders, after Opendoor announced its results, the stock plummeted over 20%.
When are OPEN shares down so much?
There are a few reasons why OPEN shares have fallen so much since the company announced its results yesterday.
The first is that the company reported a disappointing revenue guidance for the current Q3. It said it expects revenue of $800 million to $875 million. As noted by CNBC, that would represent a 36% decline from the same period a year ago.
This revenue decline is partly expected due to the current challenging home-buying environment. High interest rates, which in turn make mortgage rates high, deter home buyers, resulting in decreased home sales.
Another possible factor in Opendoor’s stock price slump today is that the company did not give much detailed information on its evolving business model, which it has dubbed “Product to Platform.”
This new model will see Opendoor “moving from a single product to a distributed platform with multiple offerings delivered through agents,” according to comments from CEO Carrie A. Wheeler on the company’s earnings call.
When a company radically changes its business model, it introduces uncertainty—and uncertainty makes investors nervous.
A third possible reason why OPEN stock is falling so much today is much simpler: It’s a meme stock, and meme stocks are highly volatile.
Yesterday’s earnings announcement was the first since OPEN stock went stratospheric last month, and the lackluster results may be prompting some investors who got in at the right time to take profits.
OPEN stock’s wild summer
Over the past month, Opendoor’s stock has been on a wild ride. Starting around mid-July, the stock surged in popularity within the meme stock community. Shares went from being worth around 75 cents each to surging to over $3.20 per share in little more than a week.
As of yesterday’s close, OPEN shares had surged more than 313% in the past month.
However, as today’s 20% share price drop shows, when it comes to meme stocks, what goes up rapidly can come down just as rapidly.
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