Breakingviews - Risking Bear Populations Allows AI Animal Spirits to Thrive
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Dec 04 2025
0mins
Should l Buy OPEN?
Source: Reuters
Market Dynamics: The decline of short sellers in the market mirrors the historical extinction of predators in nature, leading to an imbalance where financial skeptics are increasingly targeted and marginalized, as seen with recent criticisms from CEOs like Alex Karp and Kaz Nejatian.
Short Selling Trends: The number of hedge funds engaging in short selling has drastically decreased, with only 10 remaining compared to over 50 in 2008, while cumulative short interest has risen, indicating a shift towards market-neutral strategies rather than genuine bearish bets.
Regulatory Environment: New regulations are set to impose stricter reporting requirements on short positions, which may further discourage short selling and limit the ability of investors to challenge inflated stock valuations, despite evidence suggesting that short selling can enhance market efficiency.
Importance of Short Sellers: Research indicates that short sellers play a crucial role in maintaining market integrity by correcting mispricing and highlighting corporate governance issues, suggesting that a balanced market ecosystem requires the presence of these financial "predators."
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Analyst Views on OPEN
Wall Street analysts forecast OPEN stock price to fall
5 Analyst Rating
1 Buy
2 Hold
2 Sell
Hold
Current: 4.380
Low
1.40
Averages
4.35
High
8.00
Current: 4.380
Low
1.40
Averages
4.35
High
8.00
About OPEN
Opendoor Technologies Inc. is an e-commerce platform for residential real estate transactions. By leveraging software, data science, product design and operations, the Company is engaged in building a technology platform for residential real estate that offers buyers and sellers a digital, on-demand experience. Its product offerings include Sell to Opendoor, List with Opendoor and Opendoor Marketplace. Sell to Opendoor enables sellers to utilize its core product offering to sell their home directly to it, and it resells the home to a home buyer. By selling to Opendoor, homeowners can avoid the stress of open houses, home repair coordination, overlapping mortgages, and the uncertainty that can come with listing a home on the open market. Its capital-light marketplace offering connects home sellers with both institutional and retail buyers, facilitating transactions without Opendoor taking ownership of the home. Its listing product is available in nearly all Opendoor markets.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Consumer Health Insights: Investors will closely monitor Walmart's commentary on consumer health and its 2026 financial guidance to assess future market trends and corporate strategy.
- FOMC Meeting Minutes Release: The minutes from the January FOMC meeting will be released on Wednesday, providing insights into policymakers' views on the path of interest rates, especially after holding rates steady at the start of the year, which has generated significant market interest.
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- Consumer Price Index Insights: The January CPI is projected to increase by 2.5% year-over-year, with core CPI rising by 2.6%, providing essential inflation details despite not being the Fed's preferred measure, particularly regarding persistent shelter cost inflation.
See More
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- Walmart Earnings Expectations: Analysts anticipate Walmart will report its fourth-quarter earnings on Thursday, with net sales expected to rise approximately 4% and operating income potentially increasing by 11%, further solidifying its status as a trillion-dollar company.
- Consumer Health Insights: Investors will closely monitor Walmart's commentary on consumer health and its 2026 financial guidance to assess future market trends and corporate strategy.
- FOMC Meeting Minutes Release: The minutes from the January FOMC meeting will be released on Wednesday, providing insights into policymakers' views on the path of interest rates, especially after holding rates steady at the start of the year, which has generated significant market interest.
- Personal Consumption Expenditures Data: On Friday, the Personal Consumption Expenditures (PCE) data will be released, which is the Fed's preferred inflation gauge, and the market will be keen to see if it confirms that inflation is steadily cooling or prompts the Fed to maintain a cautious stance.
See More
Opendoor's New CEO Drives Transformation Amid Challenges
- Significant Stock Volatility: Opendoor's stock surged from $0.51 to 1,800% in 2025, and while it has since declined, investor confidence in the new CEO remains high, with anticipation for the upcoming earnings report to provide positive signals.
- Revenue Decline: Despite new CEO Kaz Nejatian implementing cost-cutting and AI initiatives, Opendoor's Q3 revenue fell 34% year-over-year, with inventory dropping from 6,288 to 3,319, indicating ongoing challenges in a tough real estate market.
- Market Opportunity: Nejatian's turnaround strategy, aligned with potential improvements in the housing market, could significantly enhance the company's chances of success, especially as he reported 230 homes under contract in the last week of October, reflecting a rebound in market demand.
- Increased Investor Transparency: The new CEO launched a real-time update website for investors to track Opendoor's progress, with weekly contracts peaking at 303 homes in the last week of January, indicating positive advancements in workflow improvements and product launches.
See More
Opendoor Faces Challenges but Shows Signs of Recovery
- CEO Transformation: New CEO Kaz Nejatian is implementing significant changes, including cost-cutting and leveraging artificial intelligence, aimed at enhancing Opendoor's operational efficiency and survival in a competitive real estate market.
- Declining Performance: Despite a 34% year-over-year revenue drop in Q3, with inventory falling from 6,288 to 3,319 and only 2,568 homes sold, the potential success of Nejatian's turnaround plan could be greatly enhanced if it coincides with an improving housing market.
- Rising Contract Numbers: In the last week of October, Opendoor went under contract for 230 homes, a significant increase from 120 in late September, indicating a potential rebound in market demand that could lay the groundwork for future performance recovery.
- Increased Transparency: Nejatian has launched a real-time update website for investors to track company progress, reflecting an improvement in transparency and accountability that may bolster investor confidence moving forward.
See More
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- Bill Passage: The House overwhelmingly passed the Housing for the 21st Century Act with a vote of 390-9, indicating bipartisan support in a polarized Congress aimed at addressing the national affordability crisis.
- Policy Provisions: The legislation includes over 20 provisions, such as new studies on gaps in federal housing programs and updates to the HOME Investment Partnerships Program, incentivizing localities to ease construction barriers.
- Senate Review: The bill now moves to the Senate, where it is expected to be reshaped and negotiated; Waters has cautioned that policy tweaks alone won't resolve the housing shortage without adequate funding for core rental and homeownership programs.
- Broad Support: More than 50 industry and advocacy groups, including the Affordable Housing Tax Credit Coalition and the American Hotel & Lodging Association, have rallied behind the bill, showcasing a strong consensus for a supply-focused housing policy.
See More
Opendoor's Stock Decline and Future Prospects
- Significant Stock Decline: Opendoor's stock plummeted from a peak of $35.88 in February 2021 to the current $5, with a market cap of $4.65 billion, indicating a market pessimism that values it at less than one times this year's sales.
- Revenue Plummet: From 2022 to 2024, the company's revenue fell from $15.6 billion to $5.2 billion, with home purchases dropping from 34,962 to 14,684, and EBITDA margin declining from negative 1.1% to negative 2.8%, highlighting the fragility of its business model in a high-interest-rate environment.
- Management Changes: The appointment of new CEO Kaz Nejatian and the return of co-founders to the board may provide fresh strategic direction, although analysts expect a further 18% revenue decline to $4.2 billion in 2025, with an adjusted EBITDA margin of negative 1.9%.
- Future Growth Potential: Analysts project that from 2025 to 2027, Opendoor's revenue could grow at a 27% CAGR to $6.8 billion, and if achieved, its stock may be grossly undervalued, suggesting that investors should consider gradually accumulating shares before the market fully recovers.
See More
Key Earnings Reports and Economic Outlook This Week
- DuPont Earnings Expectations: DuPont is expected to report earnings of $0.43 per share and revenue of $1.69 billion for Q4 2025, with analysts noting ongoing pressure in short-cycle businesses, while slight improvements in the automotive sector may influence investor sentiment.
- Cisco's AI Focus: Cisco anticipates earnings of $1.02 per share and revenue of $15.1 billion for Q2 FY2026, with CEO highlighting a major multi-year campus networking refresh, making AI infrastructure demand a critical growth driver.
- Importance of Employment Report: The January employment report is expected to show an addition of 80,000 nonfarm payrolls and an unchanged unemployment rate of 4.4%, directly impacting private consumption and U.S. GDP, making it crucial for investors to monitor.
- Consumer Price Index Insights: The January CPI is projected to increase by 2.5% year-over-year, with core CPI rising by 2.6%, providing essential inflation details despite not being the Fed's preferred measure, particularly regarding persistent shelter cost inflation.
See More
