Opendoor (OPEN) Shares Plunge 9.17% as Speculative Selloff, Rising Mortgage Rates, Bearish Report Weigh

Opendoor Technologies (OPEN) shares fell 9.17% on Monday, marking the lowest price since September 2025, with an intraday drop of 10.08%. The selloff reflects a sharp correction in a stock that has been driven by speculative retail trading and heightened volatility amid conflicting investor sentiment.

Speculative activity has long dominated Opendoor’s price action, with its stock surging over 900% in three months earlier this year amid "meme stock" enthusiasm. However, the recent decline suggests a rotation out of the stock following extreme gains, as traders take profits after a period of rapid price swings. Short sellers have also intensified their positions, with 24% of available shares shorted, creating a self-reinforcing cycle of volatility. A bearish report from Citron Research and insider selling by executives further fueled skepticism, though retail traders initially shrugged off criticism through momentum-driven buying.

Underlying business challenges have compounded the stock’s instability. Elevated mortgage rates have forced Opendoor to scale back its core iBuying operations, with management forecasting a 38-43% year-over-year revenue decline in Q3. The company remains unprofitable, posting a net margin of -5.89% and a trailing twelve-month return on equity of -42.15%. Analysts have downgraded the stock to "Reduce," with a price target of $1.26, highlighting structural risks tied to its debt-heavy balance sheet and reliance on speculative capital over organic growth.

Macroeconomic pressures in the real estate sector, including reduced homebuyer demand amid high interest rates, have further strained Opendoor’s business model. The stock’s recent pullback has sparked debates about its valuation, with a price-to-sales ratio of 73% of this year’s expected sales suggesting undervaluation relative to revenue. However, critics argue the disconnect between speculative-driven momentum and operational realities makes the stock a high-risk proposition. With insider selling and bearish market sentiment intensifying, Opendoor’s path forward remains heavily dependent on improving profitability and adapting to a competitive, rate-sensitive market.