r/opendoor

I'm back with a new piece. Some of you probably read already my previous deep dives on Opendoor like the Singularity Scaler thesis (it's happening) and the Opendoor 3.0: The $1,000 Blueprint.

What we are witnessing today, I believe, is a new era of executives who departed Shopify to write their names in technology company history. This group I coin the Shopify Mafia: Kaz Nejatian (CEO), Giang LeGrice (COO), Lucas Matheson (President), Morgan Brown (Chief Growth Officer), Margaret Syms (Chief Information Security Officer), Fahd Ananta (Product lead buy-side). What the Shopify Mafia is building at Opendoor is not a real estate company with better software, as the market may view it, but it is the financial infrastructure layer for the largest asset class on earth.

I believe Opendoor is reaching an inflection point. For the first time in its public company history, we see a flywheel that is self-activating through improved COGS, a non-linear jump in acquisitions, and improving inventory health that shows homes moving faster rather than sitting on the balance sheet. From a startup narrative, I call this product-market fit. As I have written in my deep-dives before, I treat Opendoor as a late-stage VC investment in the public market: a high-beta stock, which strongly bets on management and company vision but is priced on the past. The better you understand that, the more alpha you capture.

TL;DR - Two different projection methodologies give us 1.15b in sales for Q3

I posted this last week because I was curious about sales projections:
Sales Projection

https://preview.redd.it/g1lcxz5yc9kh1.png?width=1438&format=png&auto=webp&s=79480ccf413d0f933a315fe9a9bdca12f68e3eb1

It got a little bit of traction on X, and another X user mentioned this dashboard:
https://aubermark.github.io/open-tracker/

https://preview.redd.it/0ktlerf5d9kh1.png?width=2368&format=png&auto=webp&s=71a7c70ed8f02602f7e1e1cbac0f7123ec1dab56

I asked Claude to review it and compare it to the Parcl data (it's an API to their deed tracking in 30 markets, so it's actuals) projection table I built:

https://preview.redd.it/fciqi1pbd9kh1.png?width=852&format=png&auto=webp&s=6b1383b19b702c8223b380c2d11957d8e3130d60

I like that they are using Opendoor's website to basically monitor listings and when they disappear. If the builder of that dashboard is lurking here, tyty for your work 🫡

$OPEN Bulls

We have followed this name long enough to know when the story is getting ahead of the numbers. Right now, the numbers are starting to catch up to the story.

The bull thesis on Opendoor has only gotten stronger.

The market spent years viewing this company through the lens of a failed housing cycle, heavy capital requirements and an iBuying model that nearly broke under its own weight. That history deserves to be remembered. It also creates the opportunity when a management team starts fixing the exact problems that caused the collapse.

Kaz Nejatian came over from Shopify and immediately started rebuilding the company around speed, accountability, operating leverage and AI. Lucas Matheson brought additional Shopify DNA along with his experience running Coinbase Canada. Keith Rabois and Eric Wu returned. Vu Tran was brought in as Chief AI Officer to push frontier AI through the product, operations and customer experience.

This is a serious concentration of talent around a company sitting on one of the most valuable residential real estate datasets in America.

Now execution is beginning to show up in the numbers.

Q2 revenue increased 23% sequentially to $883 million. Contribution profit increased 59%. Contribution margin reached 5.8%, up 140 basis points sequentially and year over year. Homes purchased increased 77% from Q1 and 149% year over year.

They generated 6,908 acquisition contracts while spending only $5 million on marketing. The last time Opendoor generated more than 6,000 contracts, back in Q2 2022, it spent $81 million.

Read that again. (or 3 times over for the big dumb bears)

That is operating leverage.

Management now believes the current acquisition volumes, unit economics and cost structure put the business on a path to positive Adjusted Net Income on a twelve-month go-forward basis by the end of 2026 without needing a housing recovery to bail them out.

The mortgage opportunity is also starting to matter. More than half of scheduled Opendoor resale closings in Colorado were expected to use Opendoor Home Loans. Texas was already approaching one in five only weeks after launch.

That is where our long-term thesis gets interesting.

If Opendoor can control more of the transaction through AI-driven valuation, acquisition, resale, financing and eventually additional services, the economics of every customer relationship become more valuable.

Residential real estate remains one of the largest, most fragmented and inefficient markets in America. Opendoor has spent more than a decade collecting the data. Now they are assembling the people and technology to actually exploit it.

Then management made one of the strongest capital-allocation statements I have seen from this company.

For the first time in Opendoor's history as a public company, they bought back stock.

Approximately 45.3 million shares. $158 million. Roughly 5% of shares outstanding. Repurchased around $3.49 per share.

At the same time, Opendoor raised $650 million through convertible notes carrying a 0% coupon through 2030. After the repurchase and capped-call transactions, roughly $440 million of additional growth capital is expected to land on the balance sheet.

The transaction was also structured so the company expects no net increase in share count below approximately $10.38 per share under its stated assumptions.

They reduced the share count today, raised hundreds of millions to accelerate growth, pay no regular interest on that capital, and pushed the expected dilution threshold substantially above the current stock price.

That is aggressive capital allocation. I like aggressive when the underlying operating metrics are improving.

Kaz went further and publicly stated that once legally permitted, he intends to personally purchase another $100,000 of OPEN shares.

Management is putting capital behind the thesis.

Institutions appear to be paying attention as well. The latest filings snapshot shows more than 500 institutional owners, while reported institutional long holdings have increased by roughly 223 million shares quarter over quarter.

At the same time, there is still a substantial short position sitting across the table.

The latest end-July data shows approximately 164.6 million shares sold short, representing roughly 17% of the float.

That is plenty of fuel if the fundamental story continues improving and price starts forcing people to reconsider the trade.

Now look at today's chart.

OPEN traded down to roughly $3.18, reversed violently, traded as high as roughly $3.96 and finished around $3.66, up about 4.6%.

Nearly 168 million shares traded. More than three times recent average volume.

More importantly, the 15-minute structure changed.

Price reclaimed the 9, 21, 50 and 200 EMAs. The 50 EMA pushed above the 200 EMA. The shorter averages stacked above the longer averages, with the 9 above the 21, the 21 above the 50 and the 50 marginally above the 200.

That is the first technical development in a while that has made me sit up and pay attention.

I am not declaring the weekly chart repaired. A seasoned trader should know better than to call a long-term reversal off one strong session. There is still real overhead resistance in the low-to-mid $4 range on the higher timeframe.

But now we have something we did not have before.

Volume, a bullish intraday moving-average cross, a violent rejection of the lows, improving operating metrics, rapid acquisition growth, expanding contribution profit, a credible path toward Adjusted Net Income profitability, an AI-focused management team recruited from Shopify, Coinbase and Meta, founders back in the building, institutional accumulation, more than 160 million shares still sold short, a CEO buying stock personally, a company buying back 5% of itself, and $440 million of additional growth capital raised at a 0% coupon.

That is a lot of tinder sitting around the same chart.

The thesis remains simple.

If Kaz and this team execute, Opendoor has an opportunity to become one of the most important technology platforms in American residential real estate.

AI can attack pricing, underwriting, transaction speed, operating costs and customer acquisition simultaneously. Mortgage creates another layer of economics. Opendoor's proprietary transaction history gives those systems data that a startup cannot manufacture overnight.

If they eventually make buying and selling a home dramatically faster, cheaper and more predictable, they have the opportunity to expand access to homeownership while taking friction out of one of the largest markets in the country.

There is still plenty to prove. That is precisely why the opportunity exists at these prices.

I have seen enough speculative runs in my career to know the difference between price moving first and a business beginning to earn the move.

Opendoor is finally giving the bulls operating evidence to work with.

Now I want to see price confirm it.

Get through the low $4s, start reclaiming the major weekly averages, and force 160+ million short shares to reevaluate the other side of the trade.

That is when this gets very spicy.

RIP big gay bears.

✅Memes, ✅hype, ✅positions, ✅premarket, ✅plays, ✅current drama, ect... Let's see it here!

A good rule of thumb. If the data you're sharing will be different in the next hour, it's great for the daily discussion. It's not post material.

Kaz Official Tracker: https://accountable.opendoor.com/ (updates on Tuesday)

Until Earnings, don't forget to ask and vote on questions: https://www.reddit.com/r/opendoor/comments/1v3t5dj/opendoor_open_for_questions_q2_earnings/

✅Memes, ✅hype, ✅positions, ✅premarket, ✅plays, ✅current drama, ect... Let's see it here!

A good rule of thumb. If the data you're sharing will be different in the next hour, it's great for the daily discussion. It's not post material.

Kaz Official Tracker: https://accountable.opendoor.com/ (updates on Tuesday)

Until Earnings, don't forget to ask and vote on questions: https://www.reddit.com/r/opendoor/comments/1v3t5dj/opendoor_open_for_questions_q2_earnings/

✅Memes, ✅hype, ✅positions, ✅premarket, ✅plays, ✅current drama, ect... Let's see it here!

A good rule of thumb. If the data you're sharing will be different in the next hour, it's great for the daily discussion. It's not post material.

Kaz Official Tracker: https://accountable.opendoor.com/ (updates on Tuesday)

Until Earnings, don't forget to ask and vote on questions: https://www.reddit.com/r/opendoor/comments/1v3t5dj/opendoor_open_for_questions_q2_earnings/

While convertible notes act as a temporary liquidity bridge, proponents of real estate tokenization view it as a structural cure for Opendoor's balance sheet friction.

✅Memes, ✅hype, ✅positions, ✅premarket, ✅plays, ✅current drama, ect... Let's see it here!

A good rule of thumb. If the data you're sharing will be different in the next hour, it's great for the daily discussion. It's not post material.

Kaz Official Tracker: https://accountable.opendoor.com/ (updates on Tuesday)

Until Earnings, don't forget to ask and vote on questions: https://www.reddit.com/r/opendoor/comments/1v3t5dj/opendoor_open_for_questions_q2_earnings/

✅Memes, ✅hype, ✅positions, ✅premarket, ✅plays, ✅current drama, ect... Let's see it here!

A good rule of thumb. If the data you're sharing will be different in the next hour, it's great for the daily discussion. It's not post material.

Kaz Official Tracker: https://accountable.opendoor.com/ (updates on Tuesday)

Until Earnings, don't forget to ask and vote on questions: https://www.reddit.com/r/opendoor/comments/1v3t5dj/opendoor_open_for_questions_q2_earnings/

✅Memes, ✅hype, ✅positions, ✅premarket, ✅plays, ✅current drama, ect... Let's see it here!

A good rule of thumb. If the data you're sharing will be different in the next hour, it's great for the daily discussion. It's not post material.

Kaz Official Tracker: https://accountable.opendoor.com/ (updates on Tuesday)

Until Earnings, don't forget to ask and vote on questions: https://www.reddit.com/r/opendoor/comments/1v3t5dj/opendoor_open_for_questions_q2_earnings/

Answer: "A relentless founder, a big problem, and a deep innovation"

The question in the title was from a recent video from "School of Hard Knocks" on youtube asking a soon to be billionaire VC investor.

The answer sounds exactly like Opendoor doesn't it? Obviously Kaz isn't the actual founder. But he is bringing that energy, and this company is going to be his legacy. The turnaround is going according to plan. And we have such a great team in place... as well as big problem (huge TAM), and bringing a lot of innovation to an industry that deeply needed it.

It’s all about the math…which is boring, so no hype, but I’m here because it continues to improve.

I’m curious if anyone caught any extra tidbits here that we didn’t get at the Open House.

✅Memes, ✅hype, ✅positions, ✅premarket, ✅plays, ✅current drama, ect... Let's see it here!

A good rule of thumb. If the data you're sharing will be different in the next hour, it's great for the daily discussion. It's not post material.

Kaz Official Tracker: https://accountable.opendoor.com/ (updates on Tuesday)

Until Earnings, don't forget to ask and vote on questions: https://www.reddit.com/r/opendoor/comments/1v3t5dj/opendoor_open_for_questions_q2_earnings/