Opendoor CEO Steps Down: New Leadership and Rising Stock

Opendoor Technologies Inc., a real estate company known for its iBuying model, has announced that CEO Carrie Wheeler is stepping down immediately. The news has sent the stock surging, with shares rising as much as 16% before paring the gain slightly. By midday in New York, the stock was up about 9% to $3.32.

Shrisha Radhakrishna has been named president and interim leader of Opendoor, according to a statement released on Friday. The company has retained Spencer Stuart to assist with the search for a new CEO, and the process is already underway.

Wheeler approached the board in the middle of this year to begin a succession planning process. Opendoor has been well-known for its software-driven approach to flipping homes, which gained significant traction during the housing market boom following early COVID-19 lockdowns. However, the strategy faced challenges in mid-2022 as interest rates began to rise.

A significant drop in the stock price had put the company at risk of delisting. However, last month, Canadian hedge fund manager Eric Jackson of EMJ Capital sparked a surge in the stock by posting a bullish case for Opendoor online. Jackson, who has been a vocal critic of Wheeler on social media, suggested that Opendoor co-founders Keith Rabois and Eric Wu should return to the company’s board. He also emphasized the need for Opendoor to invest more in artificial intelligence and expand its platform nationally and internationally.

“It’s obvious to anybody with a pulse who follows stocks that they’ve got to make a major move into AI and building out a truly national and international platform for real estate,” Jackson said in an interview with Bloomberg News.

Wall Street analysts have become increasingly skeptical of Opendoor in recent days. KBW downgraded the stock to a sell-equivalent rating from neutral on Tuesday, citing uncertainty surrounding the company’s strategy pivot. Citigroup also cut the stock to sell from neutral last week. Currently, of the 11 Wall Street analysts following Opendoor, one rates it a buy, five advise holding the stock, and five rate it a sell.

Despite the recent boost in trading, Opendoor’s shares are still well below their record high of $34.59 reached in 2021. Eric Feder, president of Lennar Homes’ strategic investing arm and now the lead independent director of Opendoor, emphasized the company’s focus on its data and assets.

“The board has confidence in the Opendoor team and has conviction in the strategy,” Feder said.

Opendoor’s iBuying model, which allows homeowners to sell their properties quickly and easily, has been a game-changer in the real estate market. The company’s ability to leverage technology and data to streamline the home-selling process has made it a leader in the iBuying industry. However, the challenges posed by rising interest rates and a cooling housing market have required the company to adapt and innovate.

As Opendoor navigates this transition, the appointment of Radhakrishna as interim leader and the ongoing search for a new CEO are critical steps. The company’s future success will likely depend on its ability to capitalize on its data assets and expand its technological capabilities, particularly in the realm of artificial intelligence and machine learning.

Investors and analysts will be closely watching Opendoor’s next moves, as the company seeks to regain its footing and continue its growth trajectory in an increasingly competitive and dynamic real estate market.