$OPEN: Meme Stock Frenzy Fuels Rally — But $39M Settlement Still Casts a Shadow

Court: D. Arizona

Case: 2:22-cv-01717

Opendoor Technologies OPEN has surged nearly 20x from its lows this year, driven by retail investors and speculation it could mirror Carvana’s turnaround. The stock climbed another 10.5% recently as meme-stock momentum collided with management shake-ups, including the hiring of Shopify’s Kaz Nejatian as CEO and the return of founders Eric Wu and Keith Rabois (as chair). Yet, despite its comeback story and looming catalysts ahead of its Nov. 6 earnings, the company’s $39M legal settlement remains a lingering overhang.

• +20x rebound from lows, fueled by meme-stock demand.
• New CEO Kaz Nejatian plus board reshuffle with Wu & Rabois.
• Expanded platform now active in all 50 states.
• Workforce cuts expected — from 1,400 down to 200.
• $39M settlement tied to misstatements on pricing algorithm and margins.

Timeline Overview

• Dec 21, 2020 — OPEN went public via SPAC, touting algorithm-driven pricing.
• Feb 24, 2022 — Weak margins disclosed; shares dropped 23%.
• Aug 1, 2022 — FTC fined Opendoor $62M for deceptive practices.
• Sep 19, 2022 — Bloomberg reported losses on home sales; OPEN fell 12%.
• Mar 18, 2025 — $39M settlement reached with investors.

Allegations Include

• Exaggerating efficiency of its home-pricing algorithm.
• Overstating margin stability across housing cycles.
• Failing to disclose manual intervention in pricing.
• Misrepresenting ability to stay profitable in downturns.

Investor Update

The $39M settlement resolves key litigation but underscores credibility risks. With meme-stock speculation fueling near-term moves, long-term performance hinges on management’s ability to stabilize margins and deliver on its tech-driven disruption promise.

You can check more information about it HERE.