Why Opendoor (OPEN) Shares Are Plunging Today

What Happened?

Shares of technology real estate company Opendoor (NASDAQ:OPEN) fell 23.5% in the afternoon session as the stock plunged after a recent, massive surge driven by social media hype and retail investor enthusiasm, a phenomenon often referred to as a "meme stock" rally.

The online real estate company's stock had skyrocketed in July, fueled by attention from retail investors on platforms like Reddit. This rapid ascent was not tied to any specific company news but rather to speculative trading momentum. After an explosive run that saw the stock price climb dramatically, investors began to take profits, leading to a sharp reversal. The significant drop occurred despite no new fundamental news from the company itself. This volatile price action highlights the risks associated with stocks that gain popularity through social media trends, where the price can become disconnected from the company's financial performance.

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What Is The Market Telling Us

Opendoor’s shares are extremely volatile and have had 84 moves greater than 5% over the last year. But moves this big are rare even for Opendoor and indicate this news significantly impacted the market’s perception of the business.

The previous big move we wrote about was 2 days ago, when the stock gained 80.1% after a social media post from an influential investor predicted a strong turnaround. The stock remained a favorite among retail traders, with mentions soaring on platforms like Reddit's WallStreetBets and X, turning it into a so-called "meme stock." Investor Eric Jackson, known for a successful early call on Carvana, fueled the rally by suggesting a significant upside for Opendoor, citing cost reductions and improving margins. This enthusiasm led to a surge in trading volume and a classic "short squeeze," where investors betting against the stock are forced to buy shares to cover their positions, further driving up the price.

Opendoor is up 49.7% since the beginning of the year, but at $2.38 per share, it is still trading 25.9% below its 52-week high of $3.21 from July 2025. Investors who bought $1,000 worth of Opendoor’s shares 5 years ago would now be looking at an investment worth $199.16.

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