What Happened?
Shares of technology real estate company Opendoor (NASDAQ: OPEN) jumped 55% in the morning session after the company announced a significant management shake-up, including a new chief executive and the return of its co-founders to the board.
The company appointed former Shopify COO Kaz Nejatian as its new CEO, replacing Carrie Wheeler, who resigned last month amid shareholder pressure. Investors welcomed Nejatian's track record in product innovation and AI. Additionally, co-founders Keith Rabois and Eric Wu are rejoining the board, with Rabois taking the role of chairman. The leadership changes were accompanied by a new $40 million investment into Opendoor by Wu and venture-capital firm Khosla Ventures. The market reacted with strong enthusiasm to the news, which was described by one investor as an 'incredible outcome for all shareholders.'.
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What Is The Market Telling Us
Opendoor’s shares are extremely volatile and have had 92 moves greater than 5% over the last year. But moves this big are rare even for Opendoor and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was about 21 hours ago when the stock dropped 5.7% on the news that markets pulled back, reversing early gains, as investor sentiment remained cautious despite a softer-than-expected inflation reading. Stocks rose in the morning session after an unexpected drop in the Producer Price Index (PPI) for August signaled easing inflation and raised expectations for a potential Federal Reserve interest rate cut. The U.S. Bureau of Labor Statistics reported that the PPI, which measures wholesale prices, edged down 0.1% the previous month, contrary to analyst expectations for a 0.3% rise. This data gives the Federal Reserve more flexibility to consider lowering interest rates to stimulate the economy.
Opendoor is up 515% since the beginning of the year, and at $9.78 per share, has set a new 52-week high. Investors who bought $1,000 worth of Opendoor’s shares 5 years ago would now be looking at an investment worth $769.85.
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