Why Opendoor Technologies Crashed 34.9% Last Month
Shares of Opendoor Technologies (NASDAQ: OPEN) fell a brutal 34.9% last month, according to data provided by S&P Global Market Intelligence. The iBuying and house flipping company put up solid growth in its latest quarterly result, but investors are likely worried about what a potential recession and rising mortgage rates will do to its business model. As of this writing, shares of Opendoor are down 65% year to date (YTD).
Opendoor's business model is to buy and sell houses directly from consumers, becoming a new digital middleman that disrupts the traditional real estate market. This model has brought in a lot of growth for the company. Revenue was $5.2 billion in the first quarter, up 590% year over year. However, gross profit was only $535 million (buying and selling houses has low margins) in the period, and net income was a measly $28 million. And this is while housing prices have soared to all-time highs across the United States, creating a tailwind for Opendoor's financials.
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Source Fool.com
