Opendoor Joins Meme Stock Ranks As Short Sellers Circle

Opendoor Technologies has become the market’s newest meme stock, more than doubling in a matter of hours despite its struggling, real estate–dependent business.

Opendoor operates in the instant homebuyer market, designed to streamline transactions and eliminate realtor brokerage fees. I Photo: Opendoor

Its trajectory—jumping more than 100% intraday at one point during the week—echoes the frenzied retail trading seen with GameStop four years ago, Barron’s Daily reporters Martin Baccardax and Janet H. Cho wrote.

The stock surged recently, with more than 1.8 billion shares changing hands—its highest trading volume on record, according to Dow Jones Market Data.

An endorsement by activist investor Eric Jackson may help explain the sudden surge.

Opendoor operates in the instant homebuyer market, designed to streamline transactions and eliminate realtor brokerage fees.

However, existing-home sales have dropped nearly 50% since the company went public in late 2020, largely due to rising mortgage rates. Opendoor reached a peak valuation of $20.6 billion in February 2021.

The latest rally has lifted its valuation to $3.2 billion—the highest in over a year.

GameStop, similarly struggling at the time, became “patient zero” in the meme stock phenomenon that began in January 2021, with investor “Roaring Kitty” and Reddit communities driving the momentum.

Short sellers are now lining up to bet against Opendoor’s latest spike. S3 Partners, which tracks short-selling across major U.S. indices, reports that short interest in Opendoor has risen to around 24% of shares outstanding.

Meanwhile, Opendoor options are experiencing a surge in call option activity—suggesting a possible gamma squeeze, where increased buying of call options forces market makers to buy more stock to hedge their positions, further driving up the share price.