Opendoor Technologies Jumps on iBuying Surge. Here's Why You Should Sell.

Core Insights - Opendoor Technologies experienced a 46% increase in home purchases, totaling 1,706 properties, but revenue fell by 32% year-over-year to $736 million [1] - The company holds $2 billion in net debt and has gross margins of 8.2%, amidst a historically weak U.S. housing market [1] - Opendoor's guidance for Q1 revenue is projected to decline by 10% sequentially to $662 million, with expected EBITDA losses between $33 million and $43 million [1] Financial Performance - Revenue for the fourth quarter was $736 million, exceeding analyst expectations of approximately $594 million, but down 20% from the previous quarter and 32% year-over-year [1] - Gross profit was reported at $57 million, resulting in a gross margin of 7.7%, while net losses reached $1.1 billion, primarily due to a $933 million non-cash charge related to refinancing convertible notes [1] - Sales volume decreased, with only 1,978 homes sold during the quarter, down from 2,568 in the third quarter and 2,822 a year ago [1] Market Conditions - The U.S. housing market is facing significant challenges, with the Pending Home Sales Index hitting an all-time low of 70.9 in January, down 43.3% from its peak in October 2021 [1] - Year-over-year home price growth slowed to 0.9% in December, and median list prices decreased by 2% [1] - Builder confidence has declined, with current sales flat and weaker forecasts for future sales and traffic [1] Strategic Focus - Opendoor's iBuying strategy is aimed at faster inventory turns and improved performance, with a notable 46% increase in home acquisitions [1] - The company has reduced fixed operating expenses to $35 million, down from $43 million a year earlier [1] - The share of homes on the market for over 120 days decreased from 51% to 33%, indicating progress in managing aging inventory [1]