Labaton Sucharow, a nationally ranked and award-winning shareholder rights firm, announces a securities class action lawsuit has been filed against Opendoor Technologies Inc. (NASDAQ: OPEN; OPENW) and certain of its top executives and directors with violations of the Securities Exchange Act of 1934.
Purchasers or acquirers of Opendoor Technologies Inc. securities between December 21, 2020 and September 16, 2022, both dates inclusive (the "Class Period") and/or common stock pursuant and/or traceable to the offering documents issued in connection with the business combination between Opendoor and Opendoor Labs Inc. ("Legacy Opendoor") completed on or about December 18, 2020 (the "Merger") have until December 6, 2022 to seek appointment as lead plaintiff in the Opendoor class action lawsuit.
Opendoor was formerly known as Social Capital Hedosophia Holdings Corp. II ("SCH") and operated as a special purpose acquisition company ("SPAC"), also called a blank-check company. On September 15, 2020, Opendoor, then still operating as SCH, and Legacy Opendoor, a private company operating as a digital platform for residential real estate, announced their entry into a definitive agreement for the Merger, which valued Legacy Opendoor at an enterprise value of $4.8 billion. Following the Merger, Opendoor has operated a digital platform for buying and selling residential real estate in the United States.
The Opendoor class action lawsuit alleges the offering documents and defendants made false and/or misleading statements and/or failed to disclose that: (i) the algorithm used by Opendoor to make offers for homes could not accurately adjust to changing house prices across different market conditions and economic cycles; (ii) as a result, Opendoor was at an increased risk of sustaining significant and repeated losses due to residential real estate pricing fluctuations; and (iii) accordingly, defendants overstated the purported benefits and competitive advantages of the algorithm.
On September 19, 2022, citing a review of industry data, Bloomberg reported that Opendoor appeared to have lost money on 42% of its transactions in August 2022 (as measured by the prices at which it bought and sold properties). Bloomberg further reported that the data was even worse in key markets such as Los Angeles, California, where Opendoor lost money on 55% of sales, and Phoenix, Arizona, where it lost money on 76% of sales. Worse, a global real estate tech strategist interviewed by Bloomberg, Mike DelPrete, predicted that, based on his analyses, September would likely be even worse for Opendoor than August. Bloomberg's findings evidenced the failure of Opendoor's algorithm to adjust accurately to changing market conditions. On this news, Opendoor's stock price fell by more than 12% over the following two trading sessions - an 88.61% decline from Opendoor's first post-Merger closing stock price of $31.25 per share on December 21, 2020.
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About the Firm
Labaton Sucharow LLP is one of the world's leading complex litigation firms representing clients in securities, corporate governance and shareholder rights, consumer, and cybersecurity and data privacy litigation, as well as whistleblower representation. Labaton Sucharow has been recognized for its excellence by the courts and peers, and it is consistently ranked in leading industry publications. Offices are located in New York, NY, Wilmington, DE, and Washington, D.C. More information about Labaton Sucharow is available at labaton.com.
David J. Schwartz