Eric Jackson, the founder of EMJ Capital Ltd., has stirred up a stock rally in Opendoor Technologies (NASDAQ:OPEN) that is reminiscent of Gamestop's (NYSE:GME) 2021 meme-fueled surge. He has led the rally on X and generated plenty of fanfare along the way
From June to August, Opendoor shares surged from $0.50 per share to more than $5 per share. However, the stock dropped close to $4 per share near the end of August. Jackson has been tweeting about the stock each day and recently cited seller manipulation as the reason for the stock's current decline.
"Let the shorts and sellers play their games," Jackson said in an X post at the end of August. "The world will wake up to $82, $200, $500 – and this board will be long gone by then."
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The Argument For $82
Most of the argument for Opendoor reaching $82 per share hinges on the company using artificial intelligence and its customer data to disrupt the residential real estate market, with an upcoming Fed rate cut also acting as a catalyst for Opendoor and real estate as a whole.
Opendoor co-founder Keith Rabois recently defended Jackson's bullish take on the company. Rabois believes the stock should be worth at least as much as Carvana (NASDAQ:CVNA), which would propel the stock past $82 per share. He wrote another X post that offered detailed solutions on fixing Opendoor, such as making every mortgage assumable, killing the agent partnership segment, and offering an innovative value proposition he teased that still remains under wraps.
Opendoor stock has lost close to 90% of its value since its all-time high in 2021. Jackson and Rabois also believe the company's bad management has prevented it from capitalizing on promising opportunities that could have rewarded shareholders. Jackson believes that getting rid of the bad leadership and putting the right people in charge will unlock shareholder value.
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Not Everyone Is Convinced
Although Opendoor stock has enjoyed a substantial rally, some people believe it's a meme rally that is due for a crash.
"This guy just keeps sounding dumber and dumber. For all of you [who] are buying OPEN, do you hear the things this guy says? Or see the things that he does? There is some real desperation out there in the investment world," one X user replied in the comments.
"Keep gambling," another X user responded to the post.
Opendoor stock's rally has drawn comparisons to Gamestop, but it is important for investors to remember how that rally ended before they put their life's savings into Opendoor. GameStop is down by more than 70% from its meme highs, and if Opendoor stock follows in its footsteps, it would be a major blow to current investors.
Jackson hopes to transform the company before that happens, and the OPEN Army, a group of retail investors that support the stock, continues to stand behind their leader.
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What Happens Next?
Jackson, Rabois, and retail investors successfully ousted former Opendoor CEO Carrie Wheeler. The company is searching for a CEO. Shrisha Radhakrishna, the company's CTO, has stepped in as interim CEO until a long-term replacement is found.
Opendoor is a speculative bet that its future prospects will be brighter than its current finances. The company's Q2 revenue only rose by 4% year-over-year, and that's not the type of growth rate that warrants a 100x return. The Q2 net loss of $29 million is better than the $92 million net loss in the same period last year, but it's still a notable loss.
Jackson has continued to tout the stock, recently reposting a message from someone who won't stop walking until the stock breaks $6. The X user also suggested putting Jackson and Rabois on the board. Jackson also reposted an X post from a user who suggested getting rid of most of the headcount and going back to a startup culture.
Jackson has successfully captivated Opendoor investors and created such a stir that it's hard to look away. The company has a lot to prove so it can retain the current surge and justify a move to $82 per share. The rally seems to live and die based on Jackson's X posts and the content that he decides to repost.
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