A new week of trading has started and a new door for investors is opened. Importantly, that new door also includes Opendoor (NASDAQ:OPEN), which started trading on the Nasdaq today. So what do you need to know about OPEN stock? And what does the Opendoor SPAC merger mean for investors?
Importantly, investors should know that up until today, Opendoor has been trading through a blank-check company. And not just any blank-check company. Social Capital Hedosophia II, the second special purpose acquisition company from Chamath Palihapitiya, took Opendoor public. Now that the trendy real estate company is trading as OPEN stock and not IPOB, it is captivating many investors.
With that in mind, here is what you need to know about OPEN stock and the Opendoor SPAC merger:
- Social Capital Hedosophia II and Opendoor first announced their SPAC merger plans in September 2020.
- Then, Social Capital shareholders voted to approve the SPAC merger on Dec. 17.
- This means that today marks the first day of trading for OPEN stock on the Nasdaq Exchange.
- Many experts are bullish on Opendoor, and shares are up slightly in intraday trading.
- Importantly, this is because the Opendoor business model is disruptive to the real estate space.
- It allows homeowners to get a quote — typically through an algorithm — and then sell houses on the Opendoor platform.
- Also importantly, the spread between the buying and selling price is how Opendoor makes money.
- Investors should note that it brought in $4.7 billion in revenue in 2019.
- Additionally, the company says that it is participating in a $1.6 trillion market.
- As a result of the Opendoor SPAC merger, the company will raise nearly $1 billion.
- According to Seeking Alpha, the company will use the SPAC proceeds to fund new products.
Why OPEN Stock Matters Here
So why should investors care about OPEN stock and the Opendoor SPAC merger? Well, the first layer to the story here comes from Chamath Palihapitiya. After bringing Virgin Galactic (NYSE:SPCE) public through the first iteration of Social Capital Hedosophia, Palihapitiya has been a champion for the SPAC space. He has cultivated quite a following, and has several more deals in the works. Because of his support for Opendoor and its transformation of real estate, many investors bought into IPOB and now OPEN stock. Importantly, Palihapitiya said at the time of the merger announcement that Opendoor would be his next 10x idea.
Additionally, the novel coronavirus has brought a catalyst for Opendoor. As you likely know, everything has moved online. Why not move the process of selling your home and getting a quote to the digital web? As InvestorPlace analyst Luke Lango wrote about the Opendoor SPAC merger, the deal is bringing real estate into a new age. Because of this, Lango even said that Opendoor would soon represent Amazon (NASDAQ:AMZN) in terms of its industry disruption.
So what should investors do here? Well, there is always a lot of volatility around these SPAC merger deals. However, InvestorPlace contributor Mark Hake is bullish here. In fact, he wrote earlier this morning that OPEN stock is worth 161% more now that the deal has closed. If he is right, that makes Opendoor look rather appealing here.
On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Sarah Smith is a Web Content Producer with InvestorPlace.com.