Opendoor, whose stock price has soared since early July, has postponed a special stockholder meeting originally scheduled for today to address a Nasdaq listing notification.
The vote, now rescheduled for Aug. 27, concerns a potential reverse stock split that, if approved by shareholders and enacted by the board, could help remedy the company's share price deficiency.
In May, the company was told by Nasdaq it was out of compliance with listing rules that require it to maintain a $1 per share closing price for 30 consecutive days. In fact,
"In light of the recent volatility in the trading of Opendoor's common stock and the impact on its trading price, the Board believes it is in the best interests of Opendoor and its stockholders to adjourn the Special Meeting today to allow for additional time to assess market conditions and the Company's stock price before holding the Special Meeting," a press release said.
On June 25, Opendoor's stock price was just over 51 cents per share and after some ups and downs, was at over 53 cents per share on June 30.
That's when the price started rising, slowly at first, to $1.04 per share on July 15. Three days later it closed at $2.25 per share.
The stock peaked at $4.97 per share on July 21, before closing that day at $3.21.
Last Friday, it reached $2.54 per share.
For Opendoor to regain compliance, it needs to close over at least $1 per share for a minimum of 10 consecutive business days by Nov. 24. However, Nasdaq in its sole discretion can extend this minimum 10-day requirement.
"As of today, Nasdaq has not notified the Company that it has regained compliance with Nasdaq listing requirements," the press release said.
Opendoor made the postponement announcement before the market opened on Monday. While at one point the price hit an intraday high of $2.75 per share, it began falling and by 11:30 a.m., it was at $2.46 per share.
The sharp gain the week of July 14 got the attention of Ryan Tomasello, who follows the stock for Keefe, Bruyette & Woods.
In a July 17 report, he pointed to 113% increase in price over the previous few days, "which we believe is a retail-driven squeeze as the stock has become popular on social threads like Reddit and X.
"We remain cautious on the shares at current levels as Opendoor's ability to scale profitability remains uncertain, particularly as the company maintains a conservative posture facing an uncertain housing backdrop in 2H," Tomasello said, noting the company's home purchase volumes "remain subdued at under [
Opendoor is set to report second quarter results on Aug. 5.
In the first quarter, it lost $85 million, following losses of $113 million in the fourth quarter,
As for those upcoming second quarter results, "Estimates from third-party tracker Datadoor suggest second quarter revenue could come in approximately10% above management's guidance and 9% above consensus," Tomasello said. "Opendoor tends to guide revenue conservatively, so we do not expect a second quarter beat to be viewed as incremental by fundamental investors."
Tomasello said while Opendoor management had "done a nice job" managing the company's expenses, he wondered how much room is left for further cuts without hurting the company's business. He pointed to an Inman report of another 40 layoffs at the company in June and transitioning 70 workers into new roles.
Going forward, he thinks Opendoor will pivot to asset-light fee income streams..
"We expect Opendoor to continue to focus on expanding non-cash offer fee streams that do not require usage of its balance sheet," Tomasello said. "To that end, the company recently announced the expansion of its agent partnership program with the launch of '
