Will Opendoor and Offerpad survive in 2025?
Boston Condos for Sale and Apartment Rentals
Will Opendoor and Offerpad survive in 2025?
Opendoor, the country’s largest iBuying operation, needs investors to start buying its stock.
The company’s stock price has been trading under $1 since it closed slightly above that mark on April 11, putting it at risk of running afoul of the Nasdaq’s minimum bid price requirement. Other competitors like Offerpad face similar headwinds.
Opendoor is one of the last players standing in the iBuying space after both Zillow and Redfin shut down their operations in the past several years. iBuying companies make their money by buying undervalued homes with cash and flipping them for a profit, as well as on the service fee they charge.
While some blamed Zillow’s 2021 shutdown on an overzealous foray into the space by a company that wasn’t operationally ready, Redfin’s shutdown a year later put a larger pall on the endeavor.
“I probably should have closed the iBuying business earlier,” Redfin CEO Glenn Kelman said at the time of closing. “It shouldn’t have taken a housing market correction to realize how capital-intensive and risky that was.”
Opendoor, the long-time market leader in the space since its founding in 2014, has soldiered on, but has consistently weathered heavy losses amid the housing market downturn.
The company, which went public through a special-purpose acquisition company offering in 2020, has had a stock price chart that has essentially mirrored the fate of the U.S. housing market: a huge spike in 2021 — all the way to $35 per share — followed by a steady decline to its current flatline. Things aren’t looking good for the future; 2025 might shape up to be another historically bad year for homebuying.
The company lost over $1 billion, as well as its co-founder and CEO Eric Wu, in 2022. It has been rapidly cutting costs in an effort to stem the losses its suffered as its transaction count has plunged.
This year, Opendoor’s stock has plunged another 40 percent.
