Veriton Investment

Opendoor Hunts for CEO as Wheeler Steps Down, Lifting Shares

(Bloomberg) -- Opendoor Technologies Inc., a real estate company that became a meme stock in recent months, said Chief Executive Officer Carrie Wheeler is stepping down immediately, an announcement that sent the stock surging.

Shrisha Radhakrishna has been named president and interim leader of Opendoor, the company said in a statement Friday.

Most Read from Bloomberg

The US-Canadian Road Safety Gap Is Getting Wider

Festivals and Parades Are Canceled Amid US Immigration Anxiety

To Head Off Severe Storm Surges, Nova Scotia Invests in ‘Living Shorelines’

Five Years After Black Lives Matter, Brussels’ Colonial Statues Remain

For Homeless Cyclists, Bikes Bring an Escape From the Streets

Opendoor shares soared Friday, rising as much as 16% before paring the gain slightly. The stock was up about 9% to $3.32 at 11:36 a.m. in New York.

Wheeler approached the board in the middle of this year to begin a succession planning process. The company has retained Spencer Stuart to help with the hunt and said its search is “well underway.”

Opendoor has been well known for its software-driven approach to flipping homes known as iBuying, which caught on with consumers in the hot housing market that followed early Covid lockdowns. The strategy became tougher in the middle of 2022 when interest rates started rising.

A plunge in the stock price had put the company at a risk of delisting. But last month, Canadian hedge fund manager Eric Jackson at EMJ Capital made a series of posts online laying out a bull case for the stock, leading to a surge.

Jackson was a vocal critic of Wheeler on X. He said Friday in an interview with Bloomberg News that Opendoor co-founders Keith Rabois and Eric Wu should come back to the company’s board. And the new leader has to push the company more into artificial intelligence, Jackson said.

“It’s obvious to anybody with a pulse who follows stocks that they’ve got to make a major move into AI and building out a truly national and international platform for real estate,” Jackson said.

Wall Street analysts had turned skeptical on Opendoor in recent days, with KBW downgrading the stock to a sell-equivalent rating from neutral on Tuesday, largely pointing toward uncertainty surrounding management’s strategy pivot. Citigroup also cut the stock to sell from neutral last week.

Of the 11 Wall Street analysts following Opendoor, one rates it a buy, five advise that investors hold the stock, and five rate it a sell.

While traders are boosting the stock in trading Friday, shares of the home-flipper are still trading well below their $34.59 record reached in 2021.

Eric Feder, president of Lennar Homes’ strategic investing arm who has been named lead independent director of Opendoor, said the company will focus on its trove of data and assets.

“The board has confidence in the Opendoor team and has conviction in the strategy,” Feder said.

(Updates shares in third paragraph, adds money manager comments in seventh paragraph.)