The stock market is in turmoil once again, with Opendoor, a real estate company that entered the public market during the SPAC craze, leading the charge. Opendoor’s business model is a bold gamble: buy homes, refurbish them quickly, and sell them for a profit.
In theory, it’s a streamlined way to buy and sell houses, cutting out the middlemen and offering a cash offer to homeowners. However, there’s a catch-Opendoor, like many companies that emerged from the SPAC bubble, has yet to show a profit. Despite a 211% rise in its share price over the last five days, the company reported a net loss of $85 million in Q1 2025. Furthermore, Opendoor’s inventory of homes continues to grow, reaching over 7,000 by the end of Q1, which could be a sign of trouble if the housing market, as many analysts predict, slows down. In fact, Goldman Sachs warns of an impending downturn in the housing market, which could further hurt companies like Opendoor. The frenzy surrounding Opendoor shares has been nothing short of a spectacle, with a staggering amount of trading activity in just one day. But with the US housing market expected to cool, and most mortgage holders locked into lower rates, Opendoor’s future seems uncertain. And let’s not forget about Chamath Palihapitiya, the so-called “SPAC King,” whose ventures have often led to massive losses. His other high-profile investments, like Virgin Galactic, have struggled to live up to expectations, and while SoFi Technologies has been a success, it stands as an exception in a sea of underperforming stocks. As we watch Opendoor’s stock soar, we can’t help but wonder: is this another case of speculative mania, or is there more substance beneath the surface?