3 Catalysts For Opendoor - Layoffs, New Mortgage Rule Impact, & Real Estate Market Stabilization

I realize that my bet on Opendoor is Risky. I consider it a Tier 3 stock in my portfolio and my position is under 1% of the portfolio. However, I see clear catalysts for Opendoor that I would really like to share.

In this video, I explain my sentiment on the latest layoffs for Opendoor (560 jobs) and how much they can potentially save. I also explain my view on interest rate direction, implications for mortgage rates, and the new federal rule upending current structure of the Loan-Level Price Adjustment (LLPA) matrix after May 1. I explain that there is a lot of hype on this as a negative news cycle, but that the economic impact may be much less than most imagine.

Opendoor has been a troubled stock ever since the Fed raised interest rates in early 2022. While the Fed was not thinking about thinking about raising rates throughout 2021, Opendoor happily built a thriving business as a liquidity provider to home sellers, buying and selling homes and earning a margin spread. This business model worked very well for almost a decade, until an unpredicted sudden historic rise in interest rates (the highest in US history) put a dent on Opendoor stock and on the company's share price and very business model. Opendoor now had overpaid for homes purchased in Q2, and is still paying the price today with losses that should continue until Q2 2023. However, it seems like Opendoor is almost done unloading 90% of its Q2 2022 homes, and Opendoor pivoted, adjusted it's algorithm, provided lower offers for newly purchased homes, became picky on its buys, and is returning to profitability on homes purchased in Q3 and Q4 2022 cohorts.

The market is not noticing this turn around, as it has cornered the stock into a desperate macro play -- a company that is obviously bankrupt.

But when I look under the hood, I see a company that is not headed for bankruptcy, and whose turn around is very possible.

In this video, I go over the implications of the Fed pausing interest rates, and whether a pivot is coming. If a pivot is coming, I conjecture that this stock will see explosive upside and will be in a prime position to start buying homes and benefit from the macro turn around. Many countries and their major central banks have already started pausing rate hikes, foretelling us that the rate hike cycle may soon pause in the USA. Janet Yellen also provided a statement that there may not be a need for further hikes.

My whole playlist on Why Opendoor Is Better: https://youtube.com/playlist?list=PLbVoWgOF_52AQn6PgCqRjHdxwtMzUxb9D - The stock kind of inspired me to start this channel!



As always, this video is NOT investment advice, and none of the contents should be construed as such. I do not make short-term or long-term price predictions for any stock investment, and all words spoken in this video are for entertainment purposes ONLY .