As Opendoor Touts Sweeping Job Cuts, Turnaround Plans, How Should You Play OPEN Stock?

Core Insights - Opendoor Technologies is undergoing significant leadership changes and operational overhauls, with a new CEO and chairman aiming to address persistent cash burn issues through aggressive workforce reductions and cost-cutting measures [1][2] - The stock has seen a dramatic increase of over 460% in 2025, largely driven by retail investor enthusiasm, but remains 75% below its all-time highs and has underperformed the broader market since its IPO in June 2020 [1][2] Leadership Changes - Kaz Nejatian, a former Shopify executive, has been appointed as CEO, while co-founder Keith Rabois returns as chairman, indicating a potential strategic shift [2] - Rabois has announced plans to reduce the workforce by 85%, from 1,400 to 200 employees, as part of a cost-cutting strategy [2] Financial Performance - In Q2 2025, Opendoor reported its first adjusted EBITDA-positive quarter in three years, with an adjusted EBITDA of $23 million compared to a $5 million loss in the same period last year [5] - The company generated revenue of $1.6 billion, with a contribution margin of 4.4%, down from 6.3% the previous year due to an older inventory mix [6] Market Challenges - The company's house-flipping business model faces structural challenges due to elevated interest rates, leading to a significant decline in home acquisition volumes [3] - In Q2, Opendoor acquired 1,757 homes, which is below prior-year levels, and the third-quarter guidance suggests only 1,200 home acquisitions with a negative adjusted EBITDA forecast of $21-28 million [6] Investor Sentiment - The recent rally in Opendoor's stock price appears disconnected from its underlying fundamentals, as indicated by former CEO Carrie Wheeler's decision to sell $35 million worth of shares, reflecting insider skepticism about current valuations [4]