Opendoor, Offerpad Shake Off Zillow Collapse With Share Surges
Opendoor, Offerpad Shake Off Zillow Collapse With Share Surges
(Bloomberg) -- Shares in tech-powered home-flippers climbed after the companies, known as iBuyers, posted quarterly results that gave investors confidence in the growth prospects for the industry after Zillow Group Inc.’s high-profile exit.
Opendoor Technologies Inc. shares jumped as much as much as 25% to $24.40 in after the company posted a narrower loss than analysts estimated and revenue that topped expectations. The stock had slipped 14% this year, closing Wednesday at $19.52.
Read more: Opendoor Technologies Jumps on Strong Revenue Forecast
San Francisco-based Opendoor pioneered a tech-powered home flipping business known as iBuying, competing with Zillow, Offerpad Solutions Inc. and others. Zillow’s decision to exit that business in the face of mounting losses has raised questions about whether it’s too risky to buy and sell thousands of homes a month.
Opendoor purchased 15,181 homes in the third quarter, a 79% increase from the previous three months, according to a statement.
“Consumers expect a digital-first experience, and Opendoor has invested in giving it to them,” Chief Executive Officer Eric Wu said in an interview. “There’s excess demand for our product. We’re proud of the fact that we are growing so quickly and doing it in a very disciplined and measured way.”
Offerpad also saw shares rise after reporting third quarter earnings. The company bought more than 2,700 homes and reported a net loss of $15 million on $540 million in quarterly revenue. Shares rose as much 9.8% to $7.95 on Thursday.
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