$OPEN - Opendoor

[Andrew Stepner]

Earnings

I'm about to get long Opendoor ahead of their earnings after today's market close.

If you have any thoughts, let me know before market close!

Zillow

Down in ~"sympathy" with $Z Zillow shutting down Zillow Offer last week and $Z getting crushed. $OPEN has been down similarly.

Fundamentally though, I think $OPEN is a better mousetrap. Elite data science. Seemingly far better ability to price homes and therefore minimize risk.

@rabois

If you don't know Keith Rabois, he is a smart but arrogant VC. Former PayPal mafia, he co-founded Opendoor and was Executive Chairman though he is primarily an investor.

Anyway, he had some controversial tweets defending $OPEN when the $Z news came out. The stock actually jumped 15% Nov 4 after he defended $OPEN:

"If you read our SPAC filings we explained how our algorithms actually work vs Zillow’s which are horrible.  Filed a year ago." - https://twitter.com/rabois/status/1456069480635904000

 

"also our projections for Q3 were released a quarter ago.  hitting those alone w make us 2-3x more valuable than Zillow." https://twitter.com/rabois/status/1456070070380150789

@justindross (3rd co-founder, no longer there) tweeted this: "The market seems to believe Zillow’s failure means Opendoor is also failing. My belief is that Opendoor’s comparative accuracy (let alone operational advantages) led to Zillow having a huge adverse selection problem. Will know for sure next week, but I remain extremely bullish" https://twitter.com/justindross/status/1455541013582319635

I have more notes but this initial email is already long so I'll stop there.

Risk

Risk is that Zillow's failure truly is bad news for Opendoor.

Thesis 

Anyway, I like this company a lot for long term prospects and this seems like a promising setup.

If you have any thoughts, let me know before market close!

Stepner

[Andrew Stepner]

So far so good on this, up 15% on earnings. I expect it to be a long term holding though and will keep it for now since I really like their concept.

Stepner

[Andrew Stepner]

Well this has come back to bite me so far at least. $OPEN currently getting crushed and very unclear why. Maybe bearishness on housing hitting them when I don't think it should (as they are a middle man).