By George Glover

Opendoor Technologies stock looked set to extend its stellar recent run on Tuesday -- but investors should be careful not to get burned.

Shares in the real estate-focused technology company were up 12% to $3.61 in premarket trading. Futures tracking the benchmark S&P 500 index slid 0.1%.

Opendoor is up more than 300% since July 11, with an endorsement by EMJ Capital founder and activist investor Eric Jackson on X appearing to trigger retail interest.

It looks like a classic example of a meme stock -- the term used to describe the likes of GameStop and AMC Entertainment when they rallied four years ago thanks to their popularity on social-media forums like Reddit's WallStreetBets.

There are two obvious drawbacks that should put investors off buying into the rally.

The first is that the real estate market has gone stagnant. Existing-home sales have fallen by nearly 50% since Opendoor went public in late 2020, and the company has reported an adjusted loss for 11 straight quarters. That makes for a bleak outlook: Only one of the nine analysts covering the stock rates it a Buy and the consensus price target for shares is just 93 cents, according to FactSet data.

The second is that timing is everything with these sorts of investments. Opendoor stock spiked as much as 79% on Monday, then gave up a big chunk of those gains in a late pullback, finishing up 43%. Anybody who bought in early in the afternoon would have ended up losing money.

Proceed carefully. These sorts of eye-popping returns may look tempting, but trying to make a quick buck off the meme-stock mania is fraught with risk.

Write to George Glover at george.glover@dowjones.com

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July 22, 2025 06:07 ET (10:07 GMT)

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