SAN DIEGO, Oct. 10, 2022 (GLOBE NEWSWIRE) — Robbins LLP informs investors who acquired shares of Opendoor Technologies Inc. OPEN securities between December 21, 2020 and September 16, 2022, or Opendoor common stock in connection with the business combination between Opendoor and Opendoor Labs Inc. completed on December 18, 2020, they may be eligible to participate in the class action against Opendoor. Shareholders who want to be appointed lead plaintiff for the class must file their papers by December 6, 2022. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. You do not have to participate in the case to be eligible for a recovery.
All representation is on a contingency fee basis. Shareholders pay no fees or expenses.
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What is this Case About: Opendoor Technologies Inc. (OPEN) Misled Investors about its Algorithm’s Ability to Adjust to Changing House Prices Across Different Market Conditions and Cycles
According to the complaint, Opendoor was formerly known as Social Capital Hedosophia Holdings Corp. II (“SCH”), which was a special purpose acquisition company. SCH merged with Legacy Opendoor, a private company operating as a digital platform for residential real estate. Since the merger in December 2020, Opendoor has operated a digital platform for buying and selling residential real estate in the U.S. The Company’s platform features a technology known as “iBuying,” which is an algorithm-based process that purportedly enables Opendoor to make accurate market-based offers to sellers for their homes, and then flip those homes to buyers for a profit.
The complaint alleges that the Offering Documents and defendants made false and misleading statements in connection with the merger. Specifically, defendants failed to disclose that: (i) the algorithm used by the Company to make offers for homes could not accurately adjust to changing house prices across different market conditions and cycles; (ii) therefore, the Company was at an increased risk of sustaining significant and repeated losses due to residential real estate pricing fluctuations; and (iii) defendants overstated the purported benefits and advantages of the algorithm.
On September 19, 2022, Bloomberg reported that the Company appeared to have lost money on 42% of its transactions in August 2022. Bloomberg further reported that the data was even worse in key markets where Opendoor lost money on 55% of sales (Los Angeles) and 76% of sales (Phoenix). A global real estate tech strategist interviewed by Bloomberg predicted that September would be worse for Opendoor than August. Following this news, Opendoor’s stock price fell $.50, or over 12%, over two trading sessions, to close at $3.56 per share on September 20, 2022 – an 88.61% decline from the Company’s first post-Merger closing price of $31.25 per share on December 21, 2020.
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