Opendoor just got pressured into a serious boardroom renovation—not by an established activist investment firm, but by retail traders who call themselves the “Open Army.”
Shares soared 79.52% today after the company named former Shopify executive Kaz Nejatian as its new CEO. That wasn’t all: Opendoor also announced that original co-founders Keith Rabois and Eric Wu are rejoining the board.
The call is coming from inside the house: Usually when a company is under pressure to shake up its board, it's from an influential and moneyed activist shareholder. But this time, the makeover was at the hands of an amorphous army of retail investors who have pushed Opendoor’s market cap from roughly $400 million to about $7 billion over the past three months.
Let’s start from the beginning: Opendoor is a digital real estate company that makes money by replacing traditional brokerages with its online platform. It was founded in 2014, but went public via a SPAC in 2020 that valued the company at $3.8 billion. Since then, Opendoor struggled, and was at risk of being delisted from the Nasdaq in May due to its stock price being so low.
But that was all before hedge fund manager Eric Jackson posted his lofty price target and investment thesis for the company on X, bringing in a huge swath of retail interest that both sent shares soaring and created a pressure campaign for CEO Carrie Wheeler to step down, which she did in August.
What’s next for Opendoor?
For all the boardroom chaos and meme stock shenanigans, most Wall Street analysts don’t think the company is worth anything nearly close to what it’s trading now. Its average price target is $1.02—about 90% lower than shares trade today.
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But Jackson told Brew Market’s Ann Berry two days ago that he’s just as bullish as ever, arguing that OpenDoor isn’t just another meme stock—it’s a “cult stock.”
“Cult stocks are real businesses,” he said. “They’re usually misunderstood by the institutional community and adopted first by the retail-oriented community.” He pointed to Tesla and Palantir as the two similar investments.
Jackson’s distinction is that, unlike meme stocks, OpenDoor has a viable business model revolutionizing the residential housing market with tech. It’s a notion that has yet to be successfully proven, though new CEO Nejatian brings a strong tech pedigree to the table. “With AI, we have the tools to make that experience radically simpler, faster, and more certain,” Nejatian said in a statement. “That’s the future we’re building.”
What lays ahead for OpenDoor remains unknown, but one thing is for sure: Retail investors have once again proven that they’re a force to be reckoned with.—LB