Opendoor Stock Falls 14% as New Chairman Calls Company 'Bloated'
Comments from newly appointed chairman Keith Rabois about deep job cuts spooked investors, erasing a large portion of the prior session's 80% rally.
Shares of Opendoor Technologies (OPEN) plunged nearly 14% on Friday after the company's newly appointed chairman, Keith Rabois, delivered a stark message about its future, calling the firm 'completely bloated' in a televised interview. The comments triggered a sharp reversal for the stock, which had skyrocketed over 80% in the previous session on news of a major leadership overhaul.
The dramatic sell-off began after Rabois, a co-founder who has returned to lead the board, appeared on CNBC's 'Squawk on the Street.' He stated that the iBuying pioneer was burdened by excessive general and administrative expenses and a 'broken' culture, suggesting the company needed to cut its workforce by as much as 85%. This would reduce the current staff from approximately 1,400 to around 200 employees, a move Rabois argued was necessary to restore a culture of innovation and efficiency.
The chairman's blunt assessment , as investors digested the implications of such a drastic restructuring. The commentary stood in sharp contrast to the market's initial optimism. Just a day earlier, Opendoor shares following the announcement that co-founder and former CEO Carrie Wheeler would step down, with Kaz Nejatian, formerly of Shopify, taking the helm.
In his interview, Rabois elaborated on the causes of the company's inefficiency, partly blaming a shift to remote work and certain diversity and inclusion initiatives for the cultural decay. His remarks suggest a new, aggressive strategy focused on slashing costs and refocusing the company on its core mission. that the new CEO would address the high overhead that has plagued the company.
For investors, the rapid reversal from euphoria to fear highlights the uncertainty surrounding Opendoor's path forward. While the leadership change was initially celebrated as a positive catalyst, the chairman's stark vision for the company's future has introduced significant execution risk, prompting a wave of profit-taking. The market will now be closely watching for concrete steps from the new management team to see if this painful overhaul can put the real estate technology firm on a sustainable path to profitability.