$OPEN: Volatile Pullback Tests Bulls — Yet $39M Settlement Overhang Persists

Court: D. Arizona

Case: 2:22-cv-01717

Opendoor Technologies OPEN slid 10.3% to $9.07 after a volatile week that mirrored risk-off sentiment across speculative assets, including a broad crypto sell-off. Despite delivering its first positive adjusted EBITDA since 2022 and reporting $1.6B in Q2 revenue, guidance flagged a return to losses as housing volumes stay soft. With a new CEO incentivized by ambitious equity targets, the company faces both opportunity and uncertainty — but the $39M investor settlement continues to shadow the stock’s turnaround narrative.

• $1.6B Q2 revenue, up year over year, but guidance points to weaker Q3.
• Positive $23M adjusted EBITDA in Q2, first since 2022.
• CEO Kaz Nejatian’s ~83M PSU package tied to stock targets up to $33.
• Inventory down to 4,538 homes; contribution margin slipped to 4.4%.
• $39M settlement underscores credibility risks tied to algorithm claims.

Timeline Overview

• Dec 21, 2020 — OPEN went public via SPAC touting pricing algorithm.
• Feb 24, 2022 — Weak margins disclosed; stock fell 23%.
• Aug 1, 2022 — FTC fined Opendoor $62M for deceptive practices.
• Sep 19, 2022 — Bloomberg reported home-sale losses; shares fell 12%.
• Mar 18, 2025 — Company agreed to $39M investor settlement.

Allegations Include

• Misstating algorithm-driven pricing capabilities.
• Overstating stable profit margins across housing cycles.
• Concealing manual intervention in pricing decisions.
• Downplaying risks of operating in market downturns.

Investor Update

The $39M settlement resolves litigation but not investor skepticism. With shares still behaving like a meme stock, execution on margin recovery, leaner operations, and an agent-led model will determine whether volatility leads to sustained gains.

You can check more information about it HERE.