Opendoor Shareholder Eric Jackson Says CEO "Has to Go"

Eric Jackson, Founder and President of EMJ Capital Ltd., has faced pushback from some of his investors over his bet on Opendoor Technologies. Following the company's latest earnings call this week, Jackson explains why he believes change is needed within the Opendoor C-Suite if the company is to get back on track. Eric speaks with Carol Massar and Norah Mulinda on Bloomberg Businessweek Daily.

Opendoor Technologies Inc. was nursing years of losses and grappling with a potential delisting when it became a meme stock. Then, in a matter of days, the real estate company rallied 460%.

Chief Executive Officer Carrie Wheeler sees a chance to use newfound interest to her advantage as she tries to reposition the company from one known for flipping suburban abodes to one that offers homeowners a variety of ways to sell.

“It probably wasn’t on my bingo card for 2025,” Wheeler said in an interview. “We want to make sure we harvest this moment.”

Wheeler’s remarks came as Opendoor reported second-quarter results, a period in which it made money by one measure for the first time in three years. The company posted adjusted earnings before interest, taxes, depreciation and amortization of $23 million, beating the average analyst estimate of $17.5 million, according to data compiled by Bloomberg.

The company expects to generate revenue of as much as $875 million and report a loss of as much as $28 million in the third quarter, according to a company statement.

Opendoor pioneered a software-driven approach to flipping homes known as iBuying, which caught on with consumers in the hot housing market that followed early Covid lockdowns. At its peak, the company was acquiring 5,000 homes a month and drawing copycat efforts from well known housing players like Zillow Group Inc., Redfin Corp. and others.

The business has been complicated and risky at times, causing some iBuyers to shutter their operations. Rising interest rates also hit the industry hard, slowing the pace of US home sales significantly in the second half of 2022. That August, Opendoor lost money on 42% of its transactions and took a more cautious approach to buying homes in the months that followed.

The company has since slimmed down considerably. Two years ago, Opendoor booked more than $3 billion of revenue in the first quarter. The figure was $1.6 billion in the most recent quarter.

The stock, which peaked at $35.88 in early 2021, bottomed out this June at 51 cents and Nasdaq warned the company that it could be delisted for failing to maintain a share price of at least $1. Then Canadian hedge fund manager Eric Jackson at EMJ Capital made a series of posts online laying out a bull case for the stock, leading to the recent surge.

Opendoor has the ability to sell as much as $200 million in shares “at the market” — a tactic that meme-stock beneficiaries like GameStop Corp. and AMC Entertainment Holdings Inc. have used to capitalize on retail interest. Wheeler declined to say whether her firm had tapped its ability to raise money this way.

Even before the recent rally, Wheeler was plotting a change in course. Opendoor has expanded efforts to bring real estate agents into its process from the beginning, allowing homeowners to weigh the benefits of a fast, cash sale against a traditional listing process.

The company also introduced a product that it calls Cash Plus, in which Opendoor pays a lower price for the home and gives the seller some upside from the proceeds of the resale.

“We see a huge opportunity in front of us,” said Wheeler. “No one else is trying to change home-selling.”

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