Opendoor stock is another AMC or Gamestop

Opendoor stock is another AMC or Gamestop originally appeared on TheStreet.

GameStop has been a dying business for more than a decade. Once it became viable to download video games directly to your device, the retail chain began its slow march to irrelevancy.

Stock prices, however, do not have to correlate with a business’s actual prospects. If people want to buy shares in a company that’s in steady decline — really a managed death, in the case of GameStop — there’s nothing stopping them from doing that.

GameStop does have some positives. It has mostly short-term leases, which allows the chain to close down failing stores relatively quickly.

That’s positive for a CEO looking to wring any remaining value from the brand or one who wants to try finding something else to sell. GameStop has not been a brand with an idea toward making a major pivot.

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It’s a dying business that has remained solvent partially by selling shares of its stock, which was driven high by Reddit groups. These groups, although they sometimes pretend otherwise, didn’t buy shares becuse they believe this is a strong company that will make a huge turnaround.

Instead, many bought shares because they believed they could manipulate the stock price higher. That worked, at least for a while, but it’s rare that social media memes can actually push a stock price higher.

GameStop and AMC are both meme stocks. Image source: Ethan Miller/Getty/Shutterstock

Opendoor is one of those business ideas that seemed promising, but which never really panned out. It's one of a number of companies, along with Zillow and RedFin, that attempted to disrupt the traditional real estate model.

Under the traditional system, someone selling a home uses a traditional Realtor to list their home for sale. That professional looks at comparable sales and tries to get the seller the best price possible.

In most cases, the buyer has their own Realtor as well, and when a deal gets made, the seller pays a commission of 3% to both the buyer's and their own Realtor. That's a total of 6%, which seems steep, so countless businesses over the years have tried to find a better model.

Opendoor tried to do that by making sellers an offer on their home, before it gets listed.

“When you work with us, you can explore the market knowing you already have an offer on your home. All of our selling options include a built-in cash offer from Opendoor,” the company shared on its website.

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Basically, the company was supposed to disrupt the real estate market by making it easier for people to sell their homes. Zillow had a similar idea, but the problem for both companies quickly became obvious.

Buying a home directly left little wiggle room, so offers had to be low compared to what the seller might find on the open market. It was a business idea that simply did not pass the “real life” test.

Opendoor has undergone mass layoffs and continues to exist, but it's a shadow of its former ambitions. The company's stock has been trading below $1 since April and below $2 for much of the year.

On Friday, July 18, it made a miraculous comeback.

“Digital real estate platform Opendoor Technologies has recently exploded in popularity among retail investors, as its stock has jumped by 180% over the past week. The surge came after a bullish X post on July 14 by Eric Jackson, the head of EMJ Capital and an early Carvana bull, who shared a turnaround thesis for the struggling company and placed a long-term price target of $82 per share. Since that post, trading activity in Opendoor shares has soared by 140% compared to the previous month,” Tipranks reported.

The problem is that Opendoor's history has shown it's a niche business. It has sold about 3,000 homes for each of the past two years.

There's no reason to believe that its business will grow meaningfully over the next few years, and while its stock may be worth more than the $0.78 it was trading for on July 11, an $82 target is a fantasy from an investor looking to make a media splash.

He cited that the company will be the only player in iBuying after Zillow and Redfin have exited that market. What he doesn't say is that they stopped buying homes because it's capital-intensive and has a massive downside risk.

Jackson provided cover for Reddit memes and other speculators to push Opendoor, despite its limited upside opportunity.

Analysts agree on a broad basis that the company has limited potential.

“Turning to Wall Street, analysts have a Hold consensus rating on OPEN stock…Furthermore, the average OPEN price target of $0.83 per share implies 63.1% downside risk,” Tipranks added.

Much like GameStop and AMC, Opendoor has a limited business model. It might build a sustainable upside, but the opportunity isn't anywhere close to what many people thought years ago.

Just because Reddit and social media have jumped on Opendoor using Jackson's prediction as cover does not mean this is a good stock with strong upside. It's another failing brand with a flawed business model and a stock price low enough to be manipulated.

Opendoor stock is another AMC or Gamestop first appeared on TheStreet on Jul 20, 2025

This story was originally reported by TheStreet on Jul 20, 2025, where it first appeared.