The company reported $211 million in adjusted losses before interest, taxes, depreciation and amortization. Analysts estimated a $171 million loss, the average in a survey compiled by Bloomberg. The results were worse than Opendoor predicted because the company decided to cut prices in a bid to sell homes faster, according to a letter to shareholders Thursday.
Opendoor wrote down the value of its inventory by $573 million. That amount reflects projected losses "without taking into account the offset of any gains expected to be realized," according to the letter.
Opendoor pioneered a data-driven spin on home-flipping known as iBuying, in which the company purchases homes, makes light repairs and resells the properties. The company had benefited from the hot pandemic housing market until
Chief Executive Officer Eric Wu has laid out plans for a new marketplace that allows buyers and sellers to transact outside the traditional listing process — giving the company a potential new source of fees while limiting the amount of capital it puts at risk.
The sell-down still has a long way to go. As of the end of September, Opendoor had sold through, or was under contract to sell, 40% of the homes it made offers on in the second quarter. The company expects to be 65% through the sell-down process by the end of the year, leaving plenty of inventory to clear in 2023.
For the fourth quarter, the company projected as much as $355 million in adjusted losses before interest, taxes, depreciation and amortization.
Opendoor shares were down 4.3% in late trading to $2.24 at 4:40 p.m. New York time. They had declined 84% this year through Thursday's close.
