Coinbase's Valuation Boosted by Strong Stablecoin and Trading Revenue Growth

Steve Eisman, a former hedge fund manager known for predicting the 2008 financial crisis, has criticized the recent surge in Opendoor's stock price, calling it a "social media short squeeze" fueled by a hedge fund manager promoting the stock on social media. Eisman warns that the stock's rally is a sign of frothiness and retail investors should be cautious of chasing "meme" stocks, which can be harmful to their health. He also called a target price of $82 for the stock "either gutsy, nuts, or plain bad manipulative stuff."

Steve Eisman, the former hedge fund manager known for his role in predicting the 2008 financial crisis, has expressed concerns over the recent surge in Opendoor Technologies Inc. (NASDAQ:OPEN) stock price. Eisman, who rose to fame following his portrayal by Steve Carell in "The Big Short," has criticized the stock's rise, calling it a "social media short squeeze" [2]. He believes the rally is fueled by a hedge fund manager promoting the stock on social media, specifically Eric Jackson of EMJ Capital [2].

Eisman has warned that the stock's rally is a sign of excessive speculation and investor enthusiasm, a phenomenon he refers to as "frothiness." He advises retail investors to be cautious when chasing "meme" stocks, which he considers harmful to their health [2]. Eisman has set a target price of $82 for the stock, representing an upside of 3,128% from current levels, which he describes as "either gutsy, nuts, or just plain bad manipulative stuff" [2].

The surge in Opendoor's stock price, from $0.53 at the beginning of the month to a high of $3.21 per share, has been driven by a social media campaign by Jackson, who took a long position in the stock when it was trading under $1 per share [1]. Jackson has distanced himself from the "meme" stock tag, asserting that Opendoor is a legitimate turnaround story [1].

Eisman's warning comes amid a broader resurgence of meme stock mania, with other stocks like Kohl's Corp. (NYSE:KSS), Krispy Kreme Inc. (NASDAQ:DNUT), and GoPro Inc. (NASDAQ:GPRO) also experiencing significant gains [3]. The S&P 500 and Nasdaq 100 indices have reached record highs, and investors are borrowing heavily to buy stocks, raising concerns about high valuations [3].

The current rally has stretched valuations, with the S&P 500 trading at nearly 23 times forward earnings, well above the ten-year average of around 18 [3]. Some market watchers are comparing the current meme stock mania to the GameStop and AMC surge of 2021, which eventually led to a market correction in 2022 [3].

References:
[1] https://www.inkl.com/news/opendoor-skyrockets-314-in-a-month-amid-meme-stock-mania-hedge-fund-manager-who-reaped-windfall-gains-says-i-m-not-here-to-pump-up-a-stock
[2] https://www.benzinga.com/markets/penny-stocks/25/07/46652251/steve-eisman-of-the-big-short-fame-calls-3128-opendoor-price-target-gutsy-nuts-or-plain-manipulative
[3] https://m.economictimes.com/markets/stocks/news/return-of-meme-stock-mania-has-traders-on-alert-for-market-froth/articleshow/122942108.cms