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X is a great platform. It’s a window into the minds of people who have anxieties and OCD on issues that either do not impact their lives or events that have not happened. The angst is real.
If you are distressed by anything external, the pain is not due to the thing itself, but to your estimate of it; and this you have the power to revoke at any moment. Marcus Aurelius, Meditations
$OPEN is moving away from the I-Buyer model to a vertically integrated Full Stack Housing Model.
$OPEN transitioning away from the I-buyer model
2027 is the year Opendoor stops being an iBuyer and becomes a housing platform. P2, Cash Now More Later, already handles 20-30% of acquisitions with a fraction of the capital. P3 is in beta, using the same inventory with AI pricing to hold or sell when the number’s right. One asset, two revenue events. P1 becomes the legacy book winding down. This is vertical integration — Kaz did it at Shopify by owning the storefront, the payments, and the logistics. Now he’s doing it to housing: acquire, finance, price, and sell under one roof. If rates hit 4.5 and this stack scales, the reverse split talk dies on its own. $OPEN
David retweeted
This!
$OPEN > Amazon of real estate is not far fetched!
@nejatian said it now on the EC, and I mentioned it before in my Singularity Scaler thesis: AI can kill a business if you don't own the data. Every software layer could be recreated, but you cannot recreate the data.
Opendoor has trillions of data points you cannot copy.
The fundamental value of this data layer is so miss understood today.
Faster sales > more data > better product > faster sales.
$OPEN is building the irreplaceable.
Good call out about open reverse split. It would take one year for them being under $.99 to be delisted. So we are safe from our reverse split for another year.
David retweeted
Finished surfing some epic waves in the sea and time to add a few more shares for a total of 10,000 shares of $OPEN between 1.39 and 1.54
David retweeted
I’ve heard folks say the 10-year and by extension mortgage rates haven’t come down as much as expected given the recent stock market carnage.
But zoom out a month and yields are down ~50 bps and the 30-year fixed is closer to a 6-handle vs. an 8-handle.
Agreed!
“I genuinely think that if we end up having 10% of the market five years from now, we should all be kind of disappointed, right?” -@nejatian
Convertible notes due 2030.
10% of market share would be around 500,000 homes generating $20 billion a year. Assuming no dilution, that would push the stock price around $50/share. An almost 3000% increase from today’s stock price.
I like this opportunity. The timeline makes sense. The housing market will recover, it always does. It’s not a matter of “if”, but a matter of “when”. Because of this, I will continue to buy every day.
$OPEN
AI Buildout
The AI buildout doesn't end at the data center. It ends where the spend finally earns its keep. 🛰️🤖
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Inference is moving off the rack and into the machine. The chokepoint follows it.
Forced buyers are the best customers in capitalism. 👀
David retweeted
Well said.
To the $OPEN shareholders or ex-shareholders whining all over X today:
You bought a distressed company attempting a massive turnaround in a distressed housing market. What exactly did you expect this to look like?
If your response to a $1.50 share price is “it’s Kaz’s fault” or “it’s the board’s fault,” without any discussion of the business, its valuation, or the turnaround itself, I question whether you understood what you bought.
Management deserves scrutiny. But a falling stock price, by itself, isn’t an analysis.
This is going to be messy. They might figure it out. They might not. Failure is a real possibility, and conviction doesn’t make that risk disappear.
I’m long $OPEN because I believe the potential upside justifies the risk. It’s an asymmetric bet I’m willing to take, and I intend to remain long as long as that thesis holds.
If you need a smooth ride and constant reassurance, go buy the S&P 500.
You don’t have to own Opendoor. But if you do, understand what you own and size the position so you can handle being wrong.
Fixing CapEx
Let’s break down some numbers and objectives here.
The intent: $20 million of Q4 marketing, while they watch the data coming back from the 3P programs already live.
$5 million bought 6,000 contracts. In 2022, it took $81 million to do the same 6,000.
At today’s efficiency, $20 million maps to about 24,000 contracts.
The three objectives: clearing inventory, scaling acquisitions and operating leverage.
Resale velocity has to keep pace in the midst of all this -scaling acquisitions and clearing inventory at the same time — for the operating leverage case to really work.
$OPEN
Open Fix the Sales Mix
@iamjohnbaiano make sure this aligns with what Kaz told you on 3P and spreads.
Start with 3P. OpEx is the whole game — no inventory, no spread, no capital at risk. The fee has to cover underwriting, matching, trust and safety. Volume multiplies it, but if cost per transaction doesn’t fall, it’s a treadmill.
2P is the bridge. Capital light means less cash tied up per home, so even a thinner spread returns more on what’s actually at risk. You’re still sharing upside with the seller, so your take is capped.
1P is the original business and the most capital-hungry. Spread is everything — buy low, sell high. Capital is the constraint. OpEx is the one lever that’s actually working: marketing down 57%, ops down 36% per home.
The endgame by end of 2027: 3P at 40 to 50%, 2P at 40-plus, 1P down to 20%. 1P stops being a bleeding wound and becomes the afterthought that rides on top when 2P and 3P are firing.
This is an important distinction about $OPEN. Moreover, we need to remember OPEN 2.0 is not fully built out. We are in the process of launching P3. Cash now more later crossed over $1 billion.
I think the most important takeaway from these latest earnings isn't the numbers themselves, but what has happened over the last few months. The ability to roll out new software and iterate on it so quickly is incredibly valuable. Not every product they launch will be perfect or even successful, but having the capability to test ideas rapidly because they can build and deploy them in such a short amount of time is tremendously underrated.
Opendoor’s Q4 strategy is to offload homes at a fast rate, but at the cost of contribution margins. Q4 adjusted EBITDA guide is a loss of $70 to $85M, and contribution margin is expected to decline sequentially from the 3.3% they just posted. Spring-bought inventory is still sitting in a market where the 10-year is at 4.83 and mortgage rates are above 7%. Holding those homes and waiting for rates to fall is what nearly killed them in 2022. So they’re choosing speed over spread. Sell now, take the hit, get the cash back on the balance sheet. $910M in cash gives them the dry powder to start buying again at better prices with AI underwriting, which is the whole point of Opendoor 2.0. The metric to watch is inventory. If it shrinks in Q4, the losses are working as intended. If it doesn’t, they’re just funding a bigger pile at worse prices.
Opendoor’s Q3: $1.02B revenue, up 12% YoY. Homes purchased 4,865, up 316%. Contribution profit $34M, margin 3.3%. Adjusted EBITDA minus $31M. GAAP net loss $218M. Cash $910M. Inventory $2.57B. Q4 guide: revenue at least plus 40% YoY, adjusted EBITDA loss $70 to $85M.
Here’s my take. Kaz and the team have not finished building Opendoor 2.0 all the way around. They’re not yet built for the macro headwinds they’ve been facing — and these are some of the toughest macro headwinds in the history of housing. They’re in the process of building this stuff out. They’re doing things better, but we’re still looking at probably Q1 or Q2 of 2027 for ANI positive. And that has a lot to do with mortgage rates. The 10-year is at 4.83. We need 4.5 to really get things humming. AI is helping reduce the loss along the way — better pricing, better assessments, faster decisions. But here’s the part people miss. Watch whether Q4 inventory shrinks. If it does, the losses are a feature, not a bug. They’re getting rid of inventory so they don’t have to keep bleeding on contribution margins, building up cash, and basically starting the process again — buying at today’s better prices with AI underwriting instead of carrying a bloated pile from a market that already moved. That’s the loop. Clear, recycle, restart stronger.
I called this yesterday. This is a typical bear trap that they lay out right before earnings. The only thing that moves the stock is a good earnings report tonight.
$OPEN . Be On Guard
OPEN up 16% into earnings and the shorts are just standing there letting it happen. That’s not generosity — that’s bait. They want every last bag holder loaded up. Tomorrow after close, we find out if this is a real turnaround or just a squeeze that dies on guidance.
$OPEN Contribution Margins.
September 9th Kaz update wasn’t speculation. Q3 was mostly closed by then. He was reading real underwriting speed and seller response. 3.2 to 3.5% was already the walk-back. If tonight prints 2%, that’s not macro noise — that’s the model breaking, and it hands the bears their next leg down.
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As racks scale, the interconnect takes a bigger share of system cost than the chips. Lasers, modules and fabric decide who keeps up.
Price is what you pay. The backlog is what you get. The market has it BACKWARDS. 😎
Not FA. DYOR.
