Is this an opportunity not to be missed, or is it a risk disguised as an opportunity? Here’s what’s really behind the boom and what to consider before investing.
There’s a stock that has gained +311% in just seven days, drawing renewed investor interest on an entire class of stocks long forgotten after a prolonged downtrend and suddenly resurging from historic lows amid speculative outbursts. This rally has sent technical indicators into extreme territory, attracted new investors, and prompted analysts and market commentators to issue aggressive price targets.
But behind the meteoric rally, there may be significant risks.
Is it worth chasing this stock after such a run? Or are we looking at yet another illusion destined to deflate?
Why it’s worth buying Opendoor after the boom
The market is always fascinated by stories of major recoveries. And this real estate tech company has all the ingredients to make history. After a 96% plunge from its 2021 highs, Opendoor Technologies has staged a spectacular rebound that has rekindled investor interest in this digital platform that buys and sells homes directly.
The fundamentals, while still fragile, are showing encouraging signs, with margins improving and some of the debt being restructured through the issuance of new long-term convertible bonds. Furthermore, if the CEO actually decides to buy back shares on the market, as some experts have suggested, it could reinforce market confidence.
The environment is also becoming more favorable. After years of high interest rates, the Fed has begun cutting rates, and the US housing market is showing the first signs of stabilizing. small-cap tech stocks, which had come under pressure during the monetary tightening cycle, are now regaining investor attention and seeking undervalued equities. According to some analysts, the stock could surpass the all-time high reached in 2021 at $39.24 and reach $80.
Why not buy now
A 311% jump in just one week suggests a speculative surge. The stock has become overbought and may have reached an overvaluation. The charts also suggest a correction may be imminent.
Looking at the fundamentals, there are plenty of unknowns. The company has proposed a reverse split (between 1:10 and 1:50) to avoid losing its listing on the Nasdaq. This is a technical move, but it could hide structural problems. And if investment banks are starting to cut their targets (Citi has revised its target price from $1.40 to $0.80), it means confidence in the business model isn’t exactly at its peak.
Then there’s the management conflict, perhaps the most sensitive: co-founder Keith Rabois has publicly attacked the CEO, calling her "incompetent." This is a severe blow to management’s credibility, which risks scaring off even the most institutional investors. And without a cohesive team and a credible strategy, the likelihood of a sustainable turnaround is low.
| DISCLAIMER The information and considerations contained in this article should not be used as the sole or primary basis for making investment decisions. Readers retain full freedom in their investment choices and full responsibility for making them, as they alone know their risk appetite and time horizon. The information contained in the article is provided for informational purposes only, and its disclosure does not constitute and should not be considered an offer or solicitation to the public. |
Original article published on Money.it Italy 2025-07-22 18:59:00. Original title: Questo titolo è salito del 311% in una settimana. È ancora il momento di comprarlo?
