Opendoor Technologies Plunges 10% Amid Trading Halt Amid Meme-Stock Frenzy

Opendoor Technologies shares dropped 10.28% after a trading halt, closing at $2.88. The stock faced significant selling pressure after a 95% surge on Monday. The broader market remained relatively flat, with the S&P 500 edging up 0.06% and the Nasdaq Composite falling 0.39%. The trading halt underscores the extreme speculative trading dynamics driving Opendoor's action.

Opendoor Technologies (NASDAQ: OPEN) shares dropped 10.28% after a trading halt, closing at $2.88. The stock faced significant selling pressure following a 95% surge on Monday. The broader market remained relatively flat, with the S&P 500 edging up 0.06% and the Nasdaq Composite falling 0.39%. The trading halt underscores the extreme speculative trading dynamics driving Opendoor's action.

The trading halt occurred after the stock crossed the Nasdaq's volatility limit, which is triggered when a stock's share price moves too far and too quickly. This halt lasted for 10 minutes, allowing the stock to stabilize. Despite the volatility, the stock continued to experience significant price swings throughout the day. The stock's recent surge has been heavily influenced by retail investor enthusiasm, particularly from the WallStreetBets subreddit [1].

Opendoor Technologies uses iBuyer real estate technology to buy homes from owners for cash, make light repairs, and then flip them back onto the open market. Since going public through a SPAC transaction in December 2020, the company has yet to post a profitable quarter. However, there have been some positive signs recently, with a quarter-over-quarter uptick in its top and bottom lines from Q4 2024 to Q1 2025, as well as positive movement in its earnings before taxes, interest, depreciation, and amortization (EBITDA) [2].

The stock's recent performance has been compared to other meme stocks such as GameStop (GME) and AMC (AMC), which experienced similar retail-frenzied runs in 2021. Short bets on Opendoor had hit a record level by the end of June, accounting for more than 25% of the company's float [2].

Despite the enthusiasm, Opendoor faces substantial financial challenges. The company's top line has plummeted from its peak in 2022, and its current annual run rate is well under a third of its 2022 sales. Opendoor has also never turned a profit and has significant negative cash flow. The company's stock was trading under $1 and received a delisting warning from Nasdaq in May [1].

The Motley Fool Stock Advisor analyst team has not included Opendoor Technologies in their top 10 stocks for investors to buy now. The team highlighted other stocks with strong potential, such as Netflix and Nvidia, which have delivered significant returns for investors in the past [1].

The extreme volatility and speculative trading dynamics surrounding Opendoor Technologies highlight the risks associated with investing in meme stocks. While the stock's recent surge has been driven by retail investor enthusiasm, the company's financial challenges and lack of profitability remain significant concerns.

References:
[1] https://finance.yahoo.com/news/why-opendoor-technologies-stock-plummeting-194235783.html
[2] https://finance.yahoo.com/news/opendoor-stock-gains-42-in-wild-day-after-doubling-early-monday-as-volatility-triggers-trading-halt-201607848.html