Hedge fund manager Eric Jackson, architect of the 91% rally in Opendoor, on why he thinks the online real estate company is the “next Carvana”

When Eric Jackson was bullish on Carvana back in June 2023, with the used car seller down from a peak of $377 to trade at $25, nobody cared.

After that stock’s comeback — back to trading above $350 — a lot more people are listening to what he has to say.

You can pinpoint the moment when Jackson’s bullish thesis on the online real estate company Opendoor Technologies, unpacked in a thread on X, kickstarted discussion of the stock on social media. The head of Toronto-based EMJ Capital announced a position in the company with the belief that it could trade at $82 in a few years.

Chatter about the (highly shorted) company has heated up on the r/WallStreetBets subreddit. Volumes traded in Opendoor hit a record on Wednesday amid its 43% rally, which took the stock to $1.49 and brought this week’s gains up to 91%. Call volumes have hit records in back-to-back sessions, with a whopping 623,618 changing hands on Wednesday versus the 20-day average of less than 35,000.

Jackson’s logic, summarized: the consensus estimate for Opendoor’s fiscal 2029 sales (albeit from two analysts who have submitted projections) is $11.6 billion. That’s something the company actually surpassed before, back in its fiscal 2022, when it booked $15.6 billion in sales. He rounds that forecast up to $12 billion and slaps on a 5x enterprise value to estimated sales multiple (its peak multiple in 2021) to get there. This also presumes that net debt falls to zero over this time.

Opendoor went public in late 2020 via a SPAC led by venture capitalist and All-In podcaster Chamath Palihapitiya. The firm operates in the same business as the since shuttered home-flipping service Zillow Offers, and suffered a spectacular fall from grace: from an intraday peak of $39 in February 2021 down to just $0.50 in late June.

We spoke with Jackson about the role of social media in fueling this parabolic surge in the stock, potential catalysts for the company, what could go wrong, and more.

On the role of social media in the boom:

“I went on CNBC in June of ’23, talking about how Carvana was this big turnaround opportunity, and I think Scott Wapner at the time was pretty skeptical and nobody afterward said, ‘Man, that’s such a great idea.’ People were like, ‘Carvana? That thing is just circling the drain. Why would I want to ever touch Carvana?’ So nobody cared. That’s the biggest difference between then and now; I sort of did the Babe Ruth calling the shot once, so now more people are paying attention.” 

“Four weeks ago, I found two new companies that are in sort of AI infrastructure, but they’re more known as bitcoin miners that are kind of transitioning to AI: IREN and Cipher Mining. I started tweeting about them and then they blew up immediately.

Also my Twitter account really took off and started going up. You know, it's gone up 10,000 just in the last month, from 31,000 to 43,000 or something. And I think it’s because I’m out there saying, ‘Hey, this is the next Carvana. This is the next hundred bagger.’

There’s a real hunger. So when you talk about Robinhood and the retail interest, I totally get that from people. A lot of retail traders, or people that I communicate with on Twitter anyway, are smart people. They’re professionals.

They’re doing jobs but they’re trying to make money and a lot of them are done with the Mag 7. They know they’ve got to look at other names. They were really into quantum very early, despite the fact that every time you turn on mainstream TV they’re saying, ‘Oh, it's a bubble. Oh, isn’t this a sign of fraud? Oh, this is unsustainable,’ and all this kind of stuff. So there was a real hunger out there, for this story about IREN and Cipher being kind of the next Carvanas. And then I thought, well, maybe it’s time to look at Opendoor again.”

(Robinhood Markets Inc. is the parent company of Sherwood Media, an independently operated media company subject to certain legal and regulatory restrictions.)

“There’s a really interesting r/WallStreetBets post from two months ago actually talking about how they can be up 100x, which I hadn’t seen until I did my own tweetstorm. That was a great post. It was a really thoughtful post. Really, really detailed. I think I buy into probably 90% to 95% of what he’s saying. And I didn’t know about the whole ETF unloading, kicking it out of the Russell 2000, as a potential reason why it dipped down to $0.50 a couple of weeks ago.”

“You can’t sit here today and say for sure it will happen. But they have the potential, for sure. And I think my job is just to draw some attention to it and get some people focused on it. The more I can do that, the more the observer phenomenon will have a good start in that direction.”

On catalysts for the stock:

“If we got some more investors poking their heads in and saying, ‘Hey, we’re part of this team, the snowball that’s rolling down the mountain.’ I’d love Chamath to establish a position in the company the way he did in the GameStop days. He has an enormous following. My appeal to him on Twitter was just that if he came out and tweeted out this afternoon that he’d bought some hundred thousand shares of Opendoor, the stock would go up like 40% tomorrow or something like that. There could be things like that.”

“If the company made some sort of statement like it was taking this under advisement or it agreed in principle with the kinds of things that I’m saying. Or if it bought a bunch of stock, or if it canceled the July 28 special meeting of shareholders to vote on a reverse stock split because it’s not needed anymore and the stock is well past a buck.”

“It’s going to have earnings in the first week of August. It’s supposed to be the company’s first EBITDA-positive quarter in three years or something like that. So, a good announcement and guidance there — that’ll be a catalyst. You know what really helped Carvana in terms of its turnaround story is when it really started surprising not just for one quarter, but multiple quarters, and how it really turned from a money-losing company to a money-making company. People can then see and envision better how this thing would continue to claw market share nationally and is really unlike any other player in the space.”

On traders’ willingness to bet on returns from the left for dead:

“Well, look at Carvana — nobody had ever done a $400 to $3 to $400 move. I don’t think it had ever been done. Now that Carvana has done it, it sort of breaks the glass ceiling, I guess, and makes people realize what’s possible out there. It makes people consider a $0.50 Opendoor whereas probably they wouldn’t have a year ago. People are looking for the corners of the market where something hasn’t come back.”

On the management team:

“To do the Carvana turnaround, you’ve got to have an exceptional leader and you’ve got to have an exceptional team, which they did. So to hear Keith [Rabois, cofounder of Opendoor, whom Jackson said he “thinks the world of”] be so negative about Carrie [Wheeler, the CEO], that concerns me.

My hope would be that this is truly a 100x if not more kind of situation. And that’ll be tougher to get to if you don’t have a competent management team. I haven’t spoken to Carrie or had any interaction with her. I have no idea. I know she went to Queen’s Commerce and I have a son who goes there, and I know stupid people don’t get into Queen’s Commerce. So I know she’s pretty smart, but that’s been the only thing so far that’s worried me.”

(The author did not get into Queen’s Commerce.)

On what he wants management to do (and not do):

“The only way they’re going to get to $82 is to actually put their heads down and execute. Hopefully I’m going to be pushing ’em a little differently than how some other activist firms might be. But ultimately, everybody’s a shareholder: insiders, retail shareholders, me, institutional shareholders who might come along. So you just want to be able to advocate, ‘Hey, do X and Y and Z and you get the stock price up.’ Don’t we all agree it would be great if we could get an $82 stock price? Your legacy as management team members would be set for life. Everybody would forever think of Opendoor, not as a failed Chamath SPAC, but as a hundred bagger that came back when nobody believed in it.”

“I’ve communicated with [board member Adam Bain]. I’ve asked him to buy some stock, and I’ve asked him to cancel the plan for a reverse split. We’ll see.”

“I hope that Opendoor doesn’t sell itself because if they sell themselves, it’ll probably be for like three or four bucks, or five bucks or something like that if somebody bought ’em, bottom fishing.”

On his outlook for the US housing market:

“I mean, it’s not a secret. Everyone is sort of expecting rate cuts and they think that’ll be a tailwind instead of a headwind for this company. Did that factor in to me deciding, ‘I want to go public with this, that the next hundred bagger is Opendoor’? It’s nice to have in the back pocket with the other constellation of pluses in favor of Opendoor.”

Responses were lightly edited for clarity.