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Did you lose money on investments in Opendoor Technologies? If so, please visit Opendoor Technologies Inc. Shareholder Class Action Lawsuit or contact Peter Allocco at (212) 951-2030 or pallocco@bernlieb.com to discuss your rights.
NEW YORK, Nov. 30, 2022 (GLOBE NEWSWIRE) -- Bernstein Liebhard LLP, a nationally acclaimed investor rights law firm, reminds investors of the deadline to file a lead plaintiff motion in a securities class action lawsuit that has been filed on behalf of investors who purchased or otherwise acquired: (a) Opendoor Technologies Inc. (“Opendoor” or the “Company”) securities between December 21, 2020 and September 16, 2022, both dates inclusive (the “Class Period”); and/or (b) Opendoor common stock pursuant and/or traceable to the Offering Documents issued in connection with the business combination between the Company and Opendoor Labs Inc. (“Legacy Opendoor”), which was completed on or about December 18, 2020 (the “Merger”). The lawsuit was filed in the United States District Court for the District of Arizona and alleges violations of the Securities Act of 1933 and the Securities Exchange Act of 1934.
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, the Company, 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 merger agreement (the “Agreement”), which valued Legacy Opendoor at an enterprise value of $4.8 billion.
On October 5, 2020, the Company filed a registration statement on Form S-4 with the SEC in connection with the Merger, which, after several amendments, was declared effective by the SEC on November 27, 2020 (the “Registration Statement”). On November 30, 2020, the Company filed a proxy statement/prospectus on Form 424B3 with the SEC in connection with the Merger, which formed part of the Registration Statement (the “Proxy” and, together with the Registration Statement, the “Offering Documents”).
Following the Merger, the Company has operated a digital platform for buying and selling residential real estate in the U.S. The Company’s platform features a technology known as “iBuying,” which is an algorithm-based process that purportedly enables Opendoor to make accurate market-based offers to sellers for their homes, and then flip those homes to buyers for a profit.
Plaintiff alleges that Defendants’ statements in the Offering Documents were materially false and misleading when made because they failed to disclose that: (i) the algorithm (the “Algorithm”) used by the Company to make offers for homes could not accurately adjust to changing house prices across different market conditions and economic cycles; (ii) as a result, the Company 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 the Company 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.
Following the Bloomberg report, Opendoor’s stock price fell $0.50 per share, or 12%, over the following two trading sessions, to close at $3.56 per share on September 20, 2022 - an 88% decline from the Company’s first post-Merger closing stock price of $31.25 per share on December 21, 2020.
If you wish to serve as lead plaintiff, you must move the Court no later than December 6, 2022. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. Your ability to share in any recovery doesn’t require that you serve as lead plaintiff. If you choose to take no action, you may remain an absent class member.
If you purchased or otherwise acquired Opendoor securities, and/or would like to discuss your legal rights and options please visit Opendoor Technologies Inc. Shareholder Class Action Lawsuit or contact Peter Allocco at (212) 951-2030 or pallocco@bernlieb.com.
Since 1993, Bernstein Liebhard LLP has recovered over $3.5 billion for its clients. In addition to representing individual investors, the Firm has been retained by some of the largest public and private pension funds in the country to monitor their assets and pursue litigation on their behalf. As a result of its success litigating hundreds of lawsuits and class actions, the Firm has been named to The National Law Journal’s “Plaintiffs’ Hot List” thirteen times and listed in The Legal 500 for ten consecutive years.
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Contact Information:
Peter Allocco
Bernstein Liebhard LLP
https://www.bernlieb.com
(212) 951-2030
pallocco@bernlieb.com