Opendoor is back in the game with a new exec and board team:

Here's a recap of what happened this week :

• New CEO: Kaz Nejatian (currently COO at shopify $SHOP). Seasoned tech entrepreneur et exec. He brought G&A from 14% of revenues to 4% of revenues. This is exactly what we need for $OPEN
• New Chairman of the board: Keith Rabois
• New board position, ex-founder Eric Wu

So we can say we now have a good team for executing the vision.

One of the big problems with $OPEN is cost. As a marketplace platform, there is no reason why this can't be streamlined. Below is last quarter G&A and Sales/marketing/operation expenses. This needs to be flipped where R&D is prioritized.

Also the real estate market has been in a slump for the last 3 years, thanks to high interest rates.

Remember that in 2022, opendoor did 15b$ in revenues. Some may argue that was a fluke due to RE boom at that time, but again Opendoor had time to grow and become a better company. There are more people in the US, home are more expensives (due to inflation), so I don't see why we can't reach and exceed this level of revenues.

If the team can stay disciplined and get a 1% profit margin, this means : 15b$* 0.01 = 150m$ net income. At 20x valuation, we're talking about a valuation of ~3b$.
But this is where the magic happens.
If the can team can squeeze up the net profit margin to 3%.
I would argue if you add plus-value products (mortgages, titles, home warranty, videos tours, 3D scanning of home, remodeling/staging services, etc...) that could add another 1-2 % profit margin.
So with 5% net profit margin with 15b$ (and 20x), you get : 15b$ valuation (~20$/share).

Once market unfreezes and if opendoor can keep innovating to get faster growth and higher net profit margin then here is the path for the stock price:

• Rev = 15b$. 5% net profit margin, 20x P/E: 15b$ valuation (20$/shares)
• Rev = 30b$. 5% net profit margin, 20x P/E: 30b$ valuation (40$/shares)
• Rev = 60b$. 5% net profit margin, 20x P/E: 60b$ valuation (60$/shares)

If they can move the net profit margin to the 7% range, then we get :

• Rev = 15b$. 7% net profit margin, 20x P/E: 20b$ valuation (29$/shares)
• Rev = 30b$. 7% net profit margin, 20x P/E: 40b$ valuation (58$/shares)
• Rev = 60b$. 7% net profit margin, 20x P/E: 80b$ valuation (116$/shares)

This is what $CRVN looks like with revenues of 5b$

This is a path $OPEN can follow. I am convinced Revenues for $OPEN can exceed 2022 range, as long $OPEN keeps innovating.

Ideas for Opendoor

Small details matter.

Merch store:

Leverage the $open army. Make home ownership a movement. Simple cool gifts (cool lamp, shirts, etc...) so we can give our friends/family to help build brand awareness. Next time, they think about selling their houses, they think about Opendoor first.

Simple explanation of the company's mission

Something like :

• Making buying/selling houses cheap and fast
• Ecommerce platform for buying/selling houses

We, the $OPEN army, and everyone involved at $OPEN need to be able to clearly articulate to anyone what is $OPEN.

Focus on innovation on new products

Follow the lead from $HOOD where they out innovate the competition. Again, keep leveraging the $open army.

Simple ideas like:

• Enabling affiliate marketing and anyone to refer a seller to $open.
• Allow $open user to “swap” to another house in $open inventory at very little costs.
• Allow subscription service (rental) for corporate housing which high deposit (to de-risk any potential damages).
• Allow an option to rent before you buy? With plenty of cash down
• Focus on quality for turnaround of houses. Have contracted quality auditors that verify the house conditions.
• Create insurance product for non-
• Open the API for 3rd party, where non $OPEN users can use Opendoor to get pricing and openDoor guarantees buying the house (with a premium) even if they decide to go with an agent. Effectively buying a put option from $OPEN
• Title services
• Enable better home viewing experience. 3D videos, simple better videos (built with AI), Immersive (Apple Vision Pro) viewing experiences, etc...
• Provide a home inspection report. Those home inspection are mostly BS... like checking if the faucet work, or if there is water damage on the wall. This is where AI can help a lot.
• Mortgage services.
• Bank charter. This one is a long shot (maybe a crazy idea). For this, $OPEN may need to acquire a bank charter. One option is $LC Lending club, which is a profitable fintech with a bank charter.

Have a great week everyone!!