Could Opendoor Technologies, Inc. (NASDAQ:OPEN) be the Amazon of housing? Outspoken stock promoter Eric Jackson thinks so.
- OPEN stock pulled back on Friday. See all of the recent coverage here.
The Bull Case
Jackson shared his optimistic vision for Opendoor with Phil Rosen at the Independent Investor Summit on Friday.
"The management question has been resolved now," Jackson said.
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He pointed to major leadership changes that took place this week as one pillar of his bullish thesis for the stock.
"How could you not be bullish when they just did this huge management change, when they brought in Kaz Nejatian who is the former COO of Shopify to be the CEO of Open. Keith Rabois, Eric Wu cofounders of the company have come back onto the board of directors," Jackson stated.
Jackson sees Opendoor's business model as able to lower the cost and simplify the experience of buying and selling a home in the same way that Amazon.com, Inc. (NASDAQ:AMZN) revolutionized retail.
"This is a stock that could be the Amazon of housing," Jackson said.
He also went so far as to project that Opendoor could dominate the housing market first in the United States and then expand internationally,
The Bear Case
Rosen then asked Jackson to present his potential bear case for Opendoor.
Jackson said that an unlikely scenario where interest rates remain higher for longer is the biggest for Opendoor.
He also pointed to Rabois' cost-cutting mindset that could potentially place Opendoor in a "risky transition period" when the company would have to adjust to a much smaller workforce.
The final bear case Jackson presented was future profitability growth concerns. He posed a question of how the company would move from its first EBITDA positive quarter in three years to a model that is sustainably profitable.
Jackson didn't present a solution to the final bear case. Perhaps this is something the new management team will focus on as they assume the reins at Opendoor.
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