Talk about a reality check. Opendoor Technologies stock got smacked down hard today, falling 13.59% to $9.09 after new chairman Keith Rabois delivered some brutal honesty about the company’s condition.
The drop came just one day after shares rocketed 80% following leadership changes. Rabois and co-founder Eric Wu returned to the board while former Shopify executive Kaz Nejatian took over as CEO.
But Rabois wasn’t in a celebratory mood during his CNBC interview this morning. He took direct aim at the company’s 1,400-person workforce.
“I don’t know what most of them do,” Rabois said bluntly. He made it clear that layoffs are coming, with more than 200 employees potentially getting the axe.
The co-founder didn’t stop there. He labeled the entire workforce as “bloated” and blamed remote work for the company’s problems.
“The culture was broken,” Rabois explained. “These people were working remotely. That doesn’t work.”
Rabois promised a complete shift back to in-person work. He said Opendoor was “founded on the principle of innovation and working together in person.”
The company plans to “return to our roots,” according to the new chairman. This represents a major departure from the remote-friendly policies many tech companies adopted during the pandemic.
Opendoor’s stock has been on a wild ride lately. The shares have surged more than 1,300% over the past three months, driven largely by retail investor enthusiasm.
Many observers have labeled it the latest meme stock. But Rabois pushed back on that characterization during his interview.
He argued that retail investor involvement is actually healthy for markets. Rabois said consumers, rather than professional money managers, should decide which stocks to support.
The leadership changes came suddenly yesterday. Nejatian, who previously served as Shopify’s chief operating officer, stepped into the CEO role.
Both Rabois and Wu rejoined the board of directors. The co-founders had stepped back from day-to-day operations in recent years.
Their return signals a major strategic shift for the online real estate platform. The company has struggled with profitability as the housing market has faced headwinds.
Today’s stock drop suggests investors are taking a more cautious view. Some retail traders who bought during yesterday’s surge are likely booking profits.
The selloff makes sense from a technical perspective. After an 80% single-day gain, some profit-taking was almost inevitable.
Opendoor operates in the competitive iBuying space. The company purchases homes directly from sellers, makes repairs, then resells them.
The business model requires significant capital and has proven challenging to execute profitably. Market conditions in real estate have made things even tougher recently.
Rabois’s comments suggest major operational changes are coming quickly. The focus on reducing headcount and eliminating remote work could help cut costs.
However, such drastic changes also carry risks. Large-scale layoffs and policy shifts can disrupt business operations and employee morale.
The stock closed at $9.09, down from yesterday’s high of $10.70. Trading volume remained heavy at nearly 12 million shares, well above the average of 304 million shares.
The post Opendoor (OPEN) Stock: Co-Founder’s Brutal Assessment Sends Shares Tumbling appeared first on CoinCentral.
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