This Beaten-Down Real Estate Tech Stock Could Rise Again
Things aren't going well for property technology company Opendoor Technologies (NASDAQ: OPEN). Bloomberg reported that Opendoor lost money on 42% of the homes it sold in August, though that doesn't include the 5% fee the company collects from sellers. Many might remember how former competitor Zillow previously tried its hand at iBuying homes but gave up last fall due to poor unit economics.
But there are some enormous forces at work here, and given the recent Bloomberg coverage, investors should ask whether Opendoor will suffer a fate similar to (or worse than) Zillow's iBuying business or if there is hope for long-term success. Here's why Opendoor's darkest hours could be upon us -- and why there could soon be light.
It feels natural to compare Opendoor and Zillow. After all, they're both real estate technology companies that have pursued the same goal of making a profitable business out of iBuying, the practice of pricing and buying homes with the help of algorithms and then reselling them on the market. But Zillow ultimately failed as it couldn't accurately price homes, leading to huge losses and the company shutting that segment down last October.
Source Fool.com
