Opendoor Technologies $OPEN ( ▲ 5.07% ) surged Thursday after company executives pushed back on fears that President Trump’s call to ban institutional investors from buying single-family homes would damage the business.
Shares had sold off sharply on Wednesday after Trump urged Congress to block large investors from purchasing homes, a move that hit real estate and housing-related stocks across the board.
Why Opendoor says the market got it wrong
Management argues Opendoor was incorrectly lumped in with institutional landlords like Invitation Homes $INVH ( ▲ 0.87% ) and American Homes 4 Rent $AMH ( ▲ 2.0% ) . Unlike those firms, Opendoor does not buy homes to rent or hold long term.
The company operates as a home flipper, buying homes from sellers and reselling them as quickly as possible. Under new CEO Kaz Nejatian, Opendoor has emphasized reducing the time homes sit on its balance sheet.
“We’re not institutional investors, our job is to help people buy homes. We don’t hold the homes,” Nejatian wrote on X, adding that he supports the policy proposal.
From selloff to rebound
Opendoor shares fell as much as 13 percent on Wednesday before rebounding after Nejatian’s comments. The stock continued to climb Thursday as investors reassessed whether the proposed policy would actually affect the company.
Chairman Keith Rabois added that a ban on institutional home buying could even help Opendoor by increasing transaction volume and conversion, as fewer large buyers compete for inventory.
For now, management’s message appears to be landing, with the stock sharply higher as the market walks back its initial reaction.