Real estate flipper OpenDoor made quite a splash when it went public via a SPAC merger in December, 2020. And why not? It was going to upend the real estate “flipping” market via its revolutionary AI-driven algorithms which it employed to buy and sell homes around the country. Even when competitor Zillow exited the market with heavy losses, OpenDoor carried on (perhaps because, unlike Zillow, buying and selling – flipping – homes was OpenDoor’s only business). It has piled up losses totaling an astounding $2.2 billion through Q3, $923 million in Q3 alone. Now sitting on 16,873 empty houses (as of Oct 31) in a terrible real estate market, OpenDoor’s Artificial Intelligence might be dubbed Artificial Stupidity. Its stock has reacted more intelligently: it has tanked about 95% from its euphoric highs. (Chart from wolfstreet.com)
Jeffrey Cerny