Opendoor’s Rabois Reboot: 78% Spike, 85% Cuts, and the Next Chapter for iBuying

Keith Rabois set a clear mandate: shrink the org, get back in the office, and stop the cash burn. He said Opendoor’s roughly 1,400 employees are far more than needed and targeted a lean core of about 200 roles. That scale of reduction is a full re-architecture intended to compress decision cycles, reduce SG&A, and force line-of-sight accountability on pricing, risk, and resale velocity.

The cultural pivot is just as stark. Rabois argued remote work fractured execution and collaboration, vowing to return to roots with in-person operations and a renewed focus on merit and performance. Nejatian, arriving from Shopify, reinforced the cadence, committing to in-office leadership and an AI-first product thesis to make moving simpler, faster, and more certain.

Governance is consolidating around that approach: Rabois becomes chair and Eric Wu returns to the board. Nejatian inherits a business with stabilized liquidity but a fragile P&L. In Q2 2025, Opendoor reported $1.567 billion of revenue, 8.17% gross margin, a $13 million operating loss, and $36 million of interest expense, for a net loss of $29 million. Inventory was $1.53 billion against $789 million of cash and equivalents. Operating cash flow surged to $823 million in Q2—driven largely by an $805 million inventory reduction—not yet structural free cash flow.

The core objective is clear: improve unit economics by widening acquisition spreads, cutting holding times, and lowering fixed overhead so contribution margin isn’t swallowed by SG&A and carry. Inventory days improved to about 96 in Q2 (from roughly 202 in Q1), signaling better turns. Sustaining that trajectory without sacrificing pricing discipline is the test.

Opendoor’s spike placed it squarely in the meme-stock zeitgeist, with retail champions highlighting a return to founder intensity. Shares hit a 52-week high intraday before giving back more than 13% the following session—underscoring how sentiment-driven the first move was. The enthusiasm reflects leadership change and the promise of a leaner cost structure more than immediate fundamental gains.

The plumbing remains mixed. Over the last four quarters, Opendoor has posted negative net income each period. Q2’s operating cash inflow was primarily working-capital release as inventory came down, not steady-state unit economics. Volatility risk is substantial: the stock ran from sub-$2 in recent weeks to over $10 intraday before retracing, with flows amplified by headlines.

The implication: each execution update will be judged on spreads and turns. Demonstrable progress—lower SG&A run-rate, faster resale velocity, fewer write-downs, and contained interest expense—will be needed to convert a sentiment premium into a durable re-rating.

The macro setup has turned more forgiving just as Opendoor plans to run leaner. The average 30-year fixed mortgage rate recently slid to about 6.35%, with some lenders quoting in the high-5% range. Borrower activity responded: total mortgage applications rose 9.2% week over week, with purchase apps up 7% and refis up 12%, the strongest weekly demand since 2022.

For iBuyers, lower rates matter twice: they reduce carrying costs embedded in inventory financing and can speed resale velocity as monthly payments fall and more buyers qualify. On the rates curve, the 10-year sits near 4.06% while the 3-month hovers around 4.08%—a slight inversion but notably lower than mid-summer at key tenors, consistent with the pullback in mortgage rates.

Housing liquidity is stabilizing. Existing home sales are hovering near 4.0 million SAAR, while national price indices have flattened in recent months after a long climb. That backdrop supports the possibility of faster turns without heavy discounting. The lever is spread management: buying conservatively versus fair value and selling quickly into a gradually more receptive market. Execution—especially pricing precision and inventory quality—remains the fulcrum.

Bull case: Opendoor executes disciplined headcount reduction toward a lean core, slashing fixed costs and restoring an in-person, founder-led operating culture. AI-enhanced pricing improves spread capture, while lower rates reduce carry and quicken resale. Inventory days trend toward 60–75, contribution margins stabilize in high single digits, and interest expense drifts lower as leverage normalizes. Free cash flow becomes less dependent on working-capital swings and more reflective of true unit economics.

Base case: Execution is uneven. Cuts occur in phases with near-term productivity noise. Macro tailwinds persist but vary by region. Gross margin per home inches up as underwriting tightens, but gains are periodically offset by local mix and rate volatility. SG&A declines, operating cash flow shows episodic strength, but the P&L remains choppy with occasional write-downs.

Bear case: Aggressive reductions impair execution just as volume opportunities appear. Cultural whiplash slows delivery, meme momentum fades, and rates stall or retrace. Spreads compress, holding periods lengthen, write-downs re-accelerate, and interest expense stays sticky. Operating cash flow reverts to outflows absent working-capital release, and the market refocuses on balance-sheet risk.

Execution milestones: clarity on the pace and scale of headcount reductions, in-office transition specifics, and org design that concentrates authority in pricing, acquisitions, and resale ops. Consistent operator updates and transparency on cost structure and cash runway will signal whether founder mode is permeating.

Operating metrics to monitor: gross margin per home, contribution margin after interest, inventory days, write-downs per thousand units, list-to-close velocity, SG&A dollars and as a share of revenue, and market share in core metros.

Macro linkages: the 30-year mortgage rate trend versus the 10-year U.S. Treasury, the 3M–10Y spread as a recession risk proxy, MBA application volumes for demand pulse, existing home sales for liquidity, and national price indices for resale risk.

Signals from the tape and governance: any insider buying or director purchases following the leadership change, and whether recent congressional purchases add to the retail narrative. Analyst actions post-announcement will also indicate if institutional sentiment is moving beyond meme dynamics.