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Luke Kawa

Opendoor drops after big bottom-line miss in Q3, with red ink poised to swell in Q4

Opendoor Technologies initially tanked in after-hours trading after the online real estate company posted an adjusted loss before interest, taxes, depreciation, and amortization that was much bigger than analysts had anticipated. The stock went on to pare that decline and trade in positive territory before reversing deep into the red.

The Q3 results:

  • Revenue: $915 million (compared to an estimate of $852.9 million and guidance for $800 million to $875 million)

  • Adjusted EBITDA: -$33 million (estimate: -$23.7 million, guidance: -$28 million to -$21 million)

The red ink is poised to swell in the fourth quarter, with management guiding for an adjusted loss “in the high $40 millions to mid $50 millions,” which is a shade negative compared to Wall Street’s view for adjusted EBITDA of -$47.6 million.

The company is aiming to break even on adjusted net income “by the end of 2026, measured on a 12-month go-forward basis.”

“Our path to profitability is clear: transact with more sellers, strengthen our unit economics through better pricing and resale speed, and drive operational efficiency by being ruthless on expenses,” CEO Kaz Nejatian said in the press release.

Management also announced a dividend of tradable warrants to be issued to shareholders of record as of 5 p.m. ET on November 18. For every 30 shares owned, the holder will receive warrants that expire on November 20, 2026, that entitles their holders to purchase one share at the exercise prices of $9, $13, and $17.

The third quarter was transformative for the company, as it rose to prominence after EMJ Capital hedge fund manager Eric Jackson posted a bullish thesis on X that sparked a wave of retail interest and buying activity. This newfound attention spurred real change at the company late in the quarter, as embattled CEO Carrie Wheeler resigned and was replaced by former Shopify COO Kaz Nejatian while cofounders Eric Wu and Keith Rabois joined the board of directors. That management overhaul spurred the stock’s largest one-day gain on record.

It’s far too soon for the new leadership to have made much of a mark on the company’s operational performance in these financials.

The company provided three key objectives that it believes will enable it to achieve its profitability target:

  1. Scale acquisitions

  2. Improve unit economics and resale velocity

  3. Build operating leverage

Its so-called “$OPEN Army” of passionate retail shareholders have no shortage of suggestions on what management should do to improve the company’s outlook going forward. They’ve had the opportunity to submit questions for the conference call ahead of time through Robinhood’s Say Technologies platform.

Judging by the questions that have received the most upvotes so far, Nejatian and interim CFO Christy Schwartz will be faced with these queries and more:

  • When will we see a dramatic change in profitability?

  • Is there a partnership looming with Robinhood?

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

On October 24, Opendoor surged amid a bevy of social media posts referencing unconfirmed rumors about the potential for the company to pursue the tokenization of real-world assets (its real estate), with Robinhood frequently mentioned as a would-be partner.

Year to date, Opendoor closed as low as $0.51 in late June and at a peak of $10.52 on September 11.

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Matt Phillips

‘Golden age of profit margins’ seen in 2026

Wall Street tends to be a pretty optimistic place. But on one measure, market watchers are the most optimistic on record.

FactSet data shows the consensus estimate for S&P 500 net profit margins in calendar year 2026 calls for the gauge to climb to 13.9% in 2026.

But if borne out by events next year “it will mark the highest (annual) net profit margin reported by the index since FactSet began tracking this metric in 2008,” wrote John Butters, senior earnings analyst at the financial data company.

A recent story from Barron’s also commented on the expectations for especially fat profit margins embedded into forecasts for next year.

“We are in the golden age of margins,” RBC’s Capital Markets’ head of US equity strategy, Lori Calvasina, told the magazine.

That’s good news for investors looking forward to next year. But the follow up question, of course, is where the growth in profitability is expected to come from. The answer, as you might have guessed, is tech. Though the precise mechanisms by which those profits land in the coffers of the giant tech firms remains something of a mystery. Barron’s doesn’t get into the details, saying “call it benefits from AI, pricing power, or whatever.”

That doesn’t exactly sound like money in the bank. But even die-hard haters of AI have to acknowledge that betting against the ability of giant tech companies to generate massive profit growth has been a bad trade for the last couple decades.

The Stock Market Needs to Focus on Lucky 13

The Stock Market Needs to Focus on Lucky 13

But if borne out by events next year “it will mark the highest (annual) net profit margin reported by the index since FactSet began tracking this metric in 2008,” wrote John Butters, senior earnings analyst at the financial data company.

A recent story from Barron’s also commented on the expectations for especially fat profit margins embedded into forecasts for next year.

“We are in the golden age of margins,” RBC’s Capital Markets’ head of US equity strategy, Lori Calvasina, told the magazine.

That’s good news for investors looking forward to next year. But the follow up question, of course, is where the growth in profitability is expected to come from. The answer, as you might have guessed, is tech. Though the precise mechanisms by which those profits land in the coffers of the giant tech firms remains something of a mystery. Barron’s doesn’t get into the details, saying “call it benefits from AI, pricing power, or whatever.”

That doesn’t exactly sound like money in the bank. But even die-hard haters of AI have to acknowledge that betting against the ability of giant tech companies to generate massive profit growth has been a bad trade for the last couple decades.

markets
Luke Kawa

Opendoor rises after CEO Kaz Nejatian touts an explosion in its home-buying footprint

Opendoor Technologies gained in early trading after CEO Kaz Nejatian touted an explosion in the company’s home-buying footprint.

In a message on X, the former Shopify COO posted two maps: one of which depicts a fairly limited area in which the online real estate company would buy or sell homes, and the second of which suggests that has now expanded to include the entire lower 48:

In a follow-up tweet, Nejatian attributed the gains to AI, writing, “First pic took 10 *years* of work without AI. Second pic took 10 *weeks* of work with AI.”

On his first earnings call as CEO, Nejatian said the company had adopted a “default to AI approach.”

One of his first pledges was to launch Opendoor everywhere in the lower 48.

markets
Max Knoblauch

Hertz surges on bullish options activity

As millions begrudgingly make their way to the rental car counter amid the winter holidays, investors are pouring into calls and sending Hertz stock soaring.

As of 10:51 a.m. eastern, Hertz had seen 17,861 calls traded. That’s already significantly ahead of the 20-day average volume of 12,956. Hertz shares are up more than 12%.

Seemingly juicing the rally was a post on X that read “car rental companies could end up being the picks and shovels of autonomy” that was reposted by billionaire Bill Ackman, whose hedge fund is one of Hertz’s largest shareholders.

If Hertz’s price action holds, the move will mark its ninth-best trading day of 2025.

markets
Luke Kawa

POET Technologies jumps on elevated call activity

Optical communications company POET Technologies is up double digits in early trading on Monday as this potential supporting player in the AI boom gets a bid from the options market.

Just an hour after the opening bell sounded, call volumes are already running well above their five-session average for a full day.

The stock became a retail favorite in early Q4 right before many speculative trades began to retreat, with record call volumes of nearly 600,000 on October 7. The last big bump in options activity came on December 3, the session after Marvell’s acquisition of Celestial AI, a customer of POET, offered some validation for its technology as a data center solution.

markets
Max Knoblauch

Nintendo dips after GameStop says the “Mario Kart World” bundle will stop being produced

Nintendo’s popular bundle that packaged the Switch 2 with “Mario Kart World” is seemingly going out of production, per a post on X from GameStop.

Shares of the console maker fell more than 3% after markets opened on Monday, implying some worry from investors that consumers may not be so willing to pay the game’s elevated $80 price tag (it’s valued at $50 in the bundle). About 9.6 million copies of the game have sold since the Switch 2 released in June, a figure that includes the bundled version.

The Switch 2 itself is still looking solid, sales-wise. It was pacing 68% ahead of the original Switch in October, though November saw a sharp market-wide spending drop-off on consoles according to data from Circana. Sony’s PS5 outsold the Switch 2 in both units and dollars last month.

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