Opendoor, the country’s largest iBuying operation, needs investors to start buying its stock.
The company’s stock price has been trading under $1 since it closed slightly above that mark on April 11, putting it at risk of running afoul of the Nasdaq’s minimum bid price requirement. Other competitors like Offerpad face similar headwinds.
The Nasdaq deems companies in violation if their price closes below $1 for 30 consecutive days. The exchange allows companies time to cure violations of the minimum bid price requirement, including initiating a stock split, although there are limits to how often companies can use that measure.
Opendoor did not respond to a request for comment.
Opendoor is one of the last players standing in the iBuying space after both Zillow and Redfin shut down their operations in the past several years. iBuying companies make their money by buying undervalued homes with cash and flipping them for a profit, as well as on the service fee they charge.
While some blamed Zillow’s 2021 shutdown on an overzealous foray into the space by a company that wasn’t operationally ready, Redfin’s shutdown a year later put a larger pall on the endeavor.
“I probably should have closed the iBuying business earlier,” Redfin CEO Glenn Kelman said at the time of closing. “It shouldn’t have taken a housing market correction to realize how capital-intensive and risky that was.”
Offerpad, another competitor in the space, staved off a noncompliance notice from the New York Stock Exchange back in 2022, but just last week received a notice from NYSE that it faced delisting because its market capitalization fell below $50 million.
Opendoor, the long-time market leader in the space since its founding in 2014, has soldiered on, but has consistently weathered heavy losses amid the housing market downturn.
The company, which went public through a special-purpose acquisition company offering in 2020, has had a stock price chart that has essentially mirrored the fate of the U.S. housing market: a huge spike in 2021 — all the way to $35 per share — followed by a steady decline to its current flatline. Things aren’t looking good for the future; 2025 might shape up to be another historically bad year for homebuying.
The company lost over $1 billion, as well as its co-founder and CEO Eric Wu, in 2022. It has been rapidly cutting costs in an effort to stem the losses its suffered as its transaction count has plunged.
Last year, the company laid off 300 workers, or roughly 17 percent of its workforce, following a third-quarter loss of $78 million. At the end of the third quarter, the company still had nearly 6,300 homes in its portfolio, with almost a quarter of those on the market for at least 120 days. At the beginning of 2024, its stock price hovered a little above $5 — by the end of the year, it sank to a little north of $1.
This year, Opendoor’s stock has plunged another 40 percent.