Opendoor Technologies’ shares rose by about 16 percent on Friday after the company announced that Carrie Wheeler, CEO of the online real-estate firm, will be stepping down.
Wheeler said that she was accelerating the succession plans, which she shared earlier in the year with the Board. She cited the need for new leadership to lead the company into the future.
Wheeler, in a blog post at X.com wrote: “The intense interest from outside in Opendoor in the last few weeks has come just when Opendoor needs to remain focused and continue moving forward.” Wheeler wrote in a post on X that “I think the best thing I could do now for Opendoor is accelerate my succession plan… and create room for new leaders to take the reigns.”
Opendoor’s board appointed Shrisha Radikhakrishna, its technology director as interim president while they search for a permanent leader.
After a dramatic rise in stock prices, the leadership change comes at a time when investors are paying renewed attention to the market, especially retail investors.
Investor campaigns and stock rebound
Opendoor’s shares are up more than six-fold since June, when they hit a low level of 51 cents. This was a price that put it in danger of being removed from Nasdaq.
Hedge fund manager Eric Jackson has played a part in the rebound. He revealed that his firm took a stake and predicted publicly it would be “a 100-bagger in the next few year.”
Stocks surged by 16% in a single session to $3.53. The stock lost the majority of its gains, and traded at $3.24. This was up around 6%.
Jackson was outspoken about the direction of the company on X, calling for Wheeler to leave and urging shareholders to “start THINKING BIG AGAIN”.
Keith Rabois (co-founder of Opendoor and venture capitalist) backed Wheeler up earlier this week, writing on X about how “not a single executive or founder” during the IPO era endorsed Wheeler.
Opendoor released its latest earnings report just a few days before the CEO switch. The report did not convince many investors that an imminent turnaround was possible.
In the third quarter of this year, the company expects only to buy 1,200 houses. This is down from the 1,757 homes it acquired in the second quarter. The marketing budget is being cut.
The housing market is facing headwinds after the SPAC boom
Opendoor became public via a Special Purpose Acquisition Company (SPAC) in 2020, riding the wave of investor excitement driven by low rates and market momentum from pandemic era.
Its model is based on using technology to purchase and sell houses for profit. However, the company’s performance has been closely tied to mortgage rates and housing market conditions.
Opendoor’s direct exposure to real estate caused it to be particularly affected by the rising interest rates and inflation that occurred in the following years.
The company’s market value dropped by 99% between early 2021 and June 2024 before bouncing back in the last few months.
Opendoor’s capitalization is now approximately $2.55 billion after Friday’s gains.
How quickly the new leadership adapts to changing housing market conditions and regains investor confidence will determine whether or not it is able to maintain its recovery.
Opendoor’s shares rise after CEO Carrie Wheeler quits under investor pressure
