¶ The Case For Opendoor
Welcome back everyone. Today on the Joseph Carlson Show we are going to talk about one of the best performing stocks in the market. Now 2025 has been a remarkable year for investors. If you're looking at your portfolio and you made semi good decisions, you've had great returns. Google's at an all time high, Microsoft is going higher and higher. Companies like NVIDIA and Amazon, even companies like Palantir and Tesla have been crushing it this year.
It's an exciting year for investors as we look across our gains. But there is one company, one company that's outperformed all the rest. And it's one that you probably wouldn't suspect because it's one that's been left for dead before. It's name is Opendoor. It's the real estate tech company where they buy and sell homes. This little real estate tech company is up 500% year to date.
It's gone parabolic. Investors are clamoring to shares, and there's a whole social media circle diving into this company. And the person behind all of this is named Eric Jackson. This guy, the one that's standing in front of Drakes home asking him if he'll buy the stock. Eric Jackson is an expert at meme stocks, at ones that have gone parabolic. In fact, this isn't the first time that he's done this. A few years ago, he gained notoriety by buying Carvana in
2022 at the absolute bottom. He was bullish on the stock when everybody had given up, when investors were shorting the stock, when they were leaving it for dead. He was one of the only ones that said that this company could turn around, that it could have substantial gains. Carvana is up over 8000% from the lows. No, not 800 percent, 8000%. It has gone parabolic for years. It's soared above any other stock. And this is Eric Jackson's work, the guy that was behind
Carvana's rise. Now he's turned his attention to Open Door. Well, I believe Open Door deserves a closer look. We're going to be looking at the full story, the history, the people behind it and running it, and the thesis for the future. Now, of course, we have a lot of other news to get to in this episode. Google is hitting a new all time high, $250 per share above a $3
trillion market cap. And the Google Gemini app, the direct competitor to Chachi PT and Grok, is now in the top spot in the app App Store. We'll be discussing that as well as we have news at ASML, a company that I've been talking about continually as being undervalued is up 5% today. It seems like it's having a breakaway. The stock is lifting further and further. We'll be discussing this one. President Trump is making some
moves. He's saying that companies should end their quarterly earnings report mandate. Instead, they should be required to report only once every six months. This follows after China that has more of a long term approach with their companies. Is this a good direction for the market to go should companies no longer report on a quarterly basis? We'll be discussing. So we have a lot to get to in this episode. Now before we jump in, just a
quick reminder. Qualtrim is a tool that I own and I've built for you, the investor. In fact, I've built it for myself. But it's been such a popular tool that we now have over 10,000 users and we get emails all the time like this one. This is real e-mail that we just got three days ago. It says, hello team. I've been in and out of Qualtrim and I've tried several tools out there. Finally I'm back at Qualtrim. That must mean something. These are the type of emails we get all the time.
Users that try out Qualtrim and then they try out a lot of different services. They come back to Qualtrim because it's better, it looks better, it works better, it functions better, it's faster, it's easier to use. It's all the things we hear over and over again. And if you're currently using other tools and you haven't tried out Qualtrim recently with some of the updates we've done,
I would suggest trying it out. You're going to like it better and you're probably overpaying for those other tools. You can try out Qualtrim today with a free trial, risk free by visiting the link in the pin comment below. Now, like we mentioned at the start, Open Door has been the best performing stock in the market going up 530% year to date. So it's 5X and it still seems like it has a lot of momentum. It's gaining more notoriety and
popularity online. And this all started with a guy named Eric Jackson. If we look back at what Eric Jackson became notable for, it all started in 2021 with a stock named Carvana. Now, Carvan is a stock that you've probably heard before, even on this channel. It was a company that I covered many times. It's a company that flips cars like a used car dealership, but they had a unique strategy. They had these big towers. They were like vending machines for vehicles.
I remember myself mocking them at one point. Remember those things? You've probably seen them on the side of the freeway. They're just stacks of cars on top of each other and a glass vending machine. That is Carvana, the company that will easily buy your car and the company that you can easily buy a car from. They deliver it right to your front porch. During the 2021 hype, many companies like Carvana, especially car companies, went up like crazy.
If we look at this stock over the past five years, we can see that in 2021, it got to a price of $370. Remember the mania that was happening, the meme stock hype? Interest rates were low. Investors were extremely bullish. They're buying up everything. And Carvana at the time was actually doing well. It was growing revenue. They were turning over a lot of cars, but then the 2021 sell off happened going into 2022. If we zoom into just the past five years, we can see this
dramatic sell off. In a matter of months. The stock price plummeted from 370 to 3:30 to $300 per share. In early 20/22, it was slashed in half down to 170 dollars, and in fact, it went down continually even in 2022, now down to $24.00 per share. In late 2022, early 2023, the stock had fallen all the way down to a price of $4.00 per share. That is a share price drop of 98% in a single year. Now, like most of us, we look at this and we see a stock price that's dropped precipitously.
It's utter destruction. The company looks like it must be in bad shape. When we looked at the fundamentals at the time, that's how it appeared. The revenue was also going down as car sales were coming to a halt. Carvana had a huge inventory of cars that they purchased at high prices. Those car prices fell and they could not sell them at a profit. So Carvana was stuck with inventory that was overvalued and they had to get rid of it. They had to turn it over.
This caused massive losses every single quarter. In fact, on a trailing basis at the most, Carvana lost $3.35 billion in a 12 month period. They were selling cars for half the price they bought them. And at the same time it looked like the company was going bankrupt. They'd taken on enormous amounts of long term debt. This is the type of debt that bankrupts companies. They can't get it paid off. It's too difficult. The interest payments stack up and cash continues to flow out.
The next step they do after they can't issue any more debt is they try to make money by selling shares. They start to dilute the shareholder, and that's exactly what Carvana did. The combination of diluting the shareholder and issuing debt caused the stock to plummet even further. Now at a certain point, Carvana for a very small amount of time hit a share price of $3.50 and that is where Eric Jackson bought the stock. His first purchase of Carvana was $3.50, almost the exact
bottom. Not only did he buy it, but he was also one of the very few, in fact one of the only ones that was vocally bullish on the company. He said that a turn around would happen. He said that it could be a potential 100 bagger and it was a potential 100 Packer. In fact, as we know now, Carvana went from $3.50 now back up to 370 dollars, up 100 times its original price. Now the stock price moving up is one thing, but do the fundamentals justify it?
Well that is the interesting part of this. It seemed like Carvana was much more than just a meme stock. It actually seemed like Eric Jackson was correct where many analysts were wrong. We were all believing this company would go bankrupt based on the financials, the long term debt, the share issuance and the bad business model. But this company was able to make it. They're able to turn things around.
Not only did revenue start to grow again instead of shrinking, but they started to get rid of their bad inventory. Quarter after quarter. The company lost less money than the prior quarter until it finally became cash flow positive. That's a decent amount for a company that was just recently looked at as going bankrupt. The free cash flow has caused their cash balance to go up in proportion to their long term debt, strengthening their balance sheet. They're no longer in distress.
They're now a cash flow positive and growing business. Now you may think that after after finding a successful 100 bagger, you might want to take the week off, maybe take a break, a vacation and things on a high for a while. That's not what Eric Jackson did. In fact, immediately after finding the Carvanha 100 bagger and being so public about it, he set off to find the next 100
bagger. He didn't want to settle for another 50 X company, he wanted another 100 X. And even during that time period in 2022, he was eyeing another company that he believes was a bit similar. This one is in a different industry, but it has a lot of the same characteristics. The company was open door. Now, if you're not familiar with the business model of open door and a basic summary, the company buys homes, it does necessary repairs and it flips them and it does that at scale.
This is a company that was another high flying stock in 2021. There's lots of people talking about the huge business. It could become disrupting the multi trillion dollar real estate business. Think about how much money is made by buying and selling homes, and Open Door seemed like it was going to be a disruptive force in that category. Well, while the stock flew in 20/21, it had a very similar fate as Carvana. Once the hype faded, investors become bearish.
The number showed negative quarter after negative quarter, and especially in the housing market. As interest rates went up, the housing market went to a standstill. Homes became unaffordable and people just stopped buying them. In that case, Open Doors business model came to a grinding halt, very similarly to Carvana. Open Door went from a evaluation of $20 billion to below 500 million.
And as that stock was completely obliterated, eviscerated, left out to die, investors giving up on it and calling it quits, guess who was silently buying shares of the company? An evaluation of below $500 million was Eric Jackson again finding his next 100 bagger, finding a stock that investors had previously given up on that has a chance for a big comeback. Now, in Jackson's case, he's actually expressed a sound thesis for the company, at least a sound thesis to buy a beat up
stock. This wasn't just the meme potential of it. He always knew that there was a social media following and cult like following of these type of companies. So it always has that meme like potential, but there's also a real business underneath. At the same time the Open Door was falling, many of the competitors to Open Door were falling more. Zillow and Redfin had completely abandoned their home flipping business, leaving Open Door to be the only one to operate in
that business. Literally the only one. They have no competitors actually doing the same thing. Every company had given up, giving them the entire opportunity. At the same time, Open Door was aggressively cutting costs, laying off, reducing expenses by over 20%. The company was doing a lot of cost cutting and internal changes to make the company more
profitable. Additionally, one of the biggest problems at the time were the high interest rates, and Jackson believed that those wouldn't last forever. He believed the Federal Reserve would eventually lower them, causing Open Door to be able to do more business in this category. Jackson believed firmly that Open Door represented another legitimate 100X opportunity, a stock that was a penny stock that would not be one for long.
Now again, Jackson had been silently purchasing shares of Open Door for some time at a price point of around 40 to $0.80. So all of his purchases were below $1.00 per share. And then in July 14th of this year he made his announcement on social media X. He announced that Open Door could be his next Carvana. He gave a detailed analysis of his fundamental thesis on the company and immediately the company went hyper viral all across X and Reddit and social media.
The thesis for Open Door was now out the next 100 bagger. Within one month, the company was up to $5 per share, already an 800% gain for Jackson, and now it's at a stock price of nearly $10 per share. This is around A12 to 15X gain in only a couple months. Now in any case that a stock goes up five to 10X in price in only a couple of months because a specific personality mentions the stock that's usually looked
at as meme stock. A lot of people just following it for the trend and they're overall ignoring the fundamentals of the company. In this case, Jackson has said that he takes offense that this isn't a meme stock. He has a real thesis here. This is a real business that could generate real big cash flows in the future, and that's
what's being priced in here. So while he defends the point that this is a real company and not a meme stock, he also does behaviors that look a little bit more meme stockish. Here's a report of Jackson standing outside of Drake's home, begging him to buy the stock. And he's taking the posting to a new level today for a second day
in a row. Standing outside of the Canadian rapper Drake's home, he's got a whiteboard asking him to buy a single share of open door you can actually see on the screen right now. So he's he's obviously this is just a, a stunt, but it's a funny one. He's literally standing outside of Drake's home with a sign saying to buy, buy the stock. And here he's asked about this, and we'll listen to his answer. Outside Drake's house, Eric, you got a PhD in management from Columbia Business School.
At what point? What was then Eurus Hall did you study? Trying to get a celebrity to buy a stock. Ain't too proud to beg, Tim. There's the answer. We tell us who inspired you to do this again? Was my 16 year old son Julian? But I have 4 kids and Julian he's my like free marketing manager. He hasn't asked me for a dime. His son is the one that gave him this idea. And if you want to get social media, if you want to get coverage, this was a good idea. So good on that 16 year old.
So while he says this isn't a meme stock, begging and front of Drake does look memish and his defense is that his 16 year old had that idea. Great idea, but it doesn't look like it's a case based entirely off of the fundamentals. Now again, when we look at Open Door, it's another company that when you look at the fundamentals right now, they don't look great. It doesn't paint the picture of a growing company where the stock should be surging up 500%.
Open Door situation is not some massive profitable company that should be going up 500% based on the fundamentals. But it's also not a company in deep distress. It's not going bankrupt tomorrow. There is time for a thesis to play out and investors are starting to bake in that thesis. They believe that there's real potential with this company beyond meme stock territory. Now one of the people that believes there's potential with this stock is one of the Co founders, Keith Fabios.
He has been brought back to help out the company and here's him addressing some of the questions and criticisms about this company. How did you come? Back to it, I think it's very simple. Retail investors figured out the potential of the company experts, Wall Street experts, etcetera, missed the potential. Real residential real estate in the world is about a $289 trillion asset and nobody has transformed the buying and selling of real estate in the world.
And Open Door has the most likely shot on goal of fixing the transaction both from the buy side and the sell side. Right there, he outlines the thesis, the potential above all else. Open door represents potential. The potential disrupt the highly lucrative and massive real estate market. Just like investors were baking in the price of that potential in 2021, they're starting to do the same. But now they have more reason to do so with Open Door than before.
Like we said earlier, Open Door does not face any competitors in this field. The other companies like Zillow and Redfin had given up. They're not in this anymore. Open Door was also the only one to execute on this with any type of positive fundamentals as well. So the company has more experience doing this home flipping, rebuying now. The real estate market is so massive, it's almost incomprehensible.
The amount of homes that get bought and sold every single day, the amount of volume and price in that, and the fact that there's been no big tech company that's actually disrupted that. It continues to operate in largely the same exact way. Because real estate is so geographical, so specific, every home is slightly different than another. Everyone has a different corner of the lot that has a different floor, a different window. It has a different backyard, a
different view. And that makes it very difficult for companies like Open Door to be successful in a home flipping business. That's where they try to do things at scale. Scale's easy when you're replicating the same thing over and over again. A restaurant can make the same exact food in one state as it does in another, in one city as it does in another. But Open Door can't apply the exact same rules for one house
that they do another. The crime rates, the traffic, the noise level, the location, everything is so specific. So even though every company like Open Door that's tried this business has failed, Open Door is still trying it. And it looks like they may have some success, especially
interest rates go down. And this is what investors are hoping for, that even if Open Door can figure out a little bit of how to do this, even if they can disrupt some of the real estate market, it would be a massive success. It would be a $100 billion company where it trades that only a $7 billion valuation today. While it's model is not fully proven today, the potential remains massive. And Keith Rabios outlines why investors are willing to price in that potential ahead of the
fundamentals. So the potential of the company is infinite and it took people like Eric Jackson, the activist investor and normal American consumers to see that one way or the other, we're going to transform the way people buy and sell houses. And then that company, they should be working a lot of money. Many people compare us to Carvana. I think the I used to compare us publicly, you know, on Twitter and X to Carvana. I think the multiple of open doors should be comparable to Carvana.
I think we have less competition and more upside. So I think hopefully we do better than Carvana, but that comparison easily gets you to where you are today. Right there we have the comparison to Carvana on it and we have the infinite potential. So there you have the case of open door. Do you believe it's a meme stock, one that we should scoff at and make fun of, or do you see a real investment case here? That's up for you to decide.
As of now, I'm not investing in this one, but it's one that I'll be watching. Now moving on, we get to some news. One of the top stories that I want to highlight today, of course, is another update on Google. And I know I sound like a broken
¶ Gemini Number One In App Store
record. Google has been such a an interesting stock because it was so bearish just a few months ago. Now it's becoming incredibly bullish. The stock price is moving up. It's up another nearly 4% today. Googles AI app is now #1 in the top three apps surpassing chat TPT. Now this is significant for a lot of reasons. This represents right now what people are downloading the most on the iPhone, the most lucrative App Store.
The people that are trend setters for the rest of the world are downloading Gemini. Chachi BT historically has dominated the number one spot for years. It's just sat there without moving. But here we have Gemini #1, Chachi BT #2 and it's been like this for a few days now. When we talk about Gemini, it was an app that started out way behind Chachi BT, not just in users but in features. When I used Gemini, it didn't have basic features like being able to pin a conversation.
The user interface was not great. It just didn't feel as good to use. But after a few updates, it's now really good. The app has caught up to chat, TPT, and functionality and in many ways have surpassed it. Google is able to use all their training on YouTube data and images to make the most incredible image generation possible, and that's gained a
lot of popularity. But what we see here is that Google is slowly but surely crawling its way back into the lead, not just in search, but now in specific AI. People said for a long time that you don't. You don't Google something now you chat, GT it. But now a lot of people are going to be Geminiing things. They're going to be searching on Google or Gemini. The power of Google's distribution is one of the most important parts of Google's long standing success.
Now we also have another company that's going up big today, which is ASML, and there's really no big notable news here. The company is up 5% today and I believe because it's on a winning streak, investors are finally getting bullish on this company. I've said before, the ASML is a company that has been undervalued for some time and now it looks like it's finally getting a breakout.
That's well deserved With ASML. It shows that there doesn't need to be any big catalyst for a company to move. In many cases, the best catalyst is just value. Now we also have news of President Trump calling for the
¶ Should We End Quarterly Reports
end of quarterly earnings reports in favor of a six month reporting period. The Wall Street Journal reports that President Trump said companies should no longer be required to report earnings on a quarterly basis, an idea that explored he explored during his first term that has gained traction recently. Publicly traded companies in the US have reported results every three months for the past 50 years. Instead, Trump argued companies should report their earnings every six months.
This will save money and allow managers to focus on properly running their companies. Now, the argument for this is that companies in the United States report so frequently that they're so busy just focusing on the next quarter. They're not long term focused. They're just focusing on what this next number for this next quarter is going to be. And there's certainly some truth to that.
A lot of companies, of course, in the United States are focused on having that quarterly performance that year over year gain on a quarterly basis and they push numbers for the quarter. In many cases, you'll find companies that do so at the detriment of their long term performance and this could cause companies to underperform. But there's also another side to this trade off that is very significant. For one, transparency.
The move is likely to face opposition from investors who rely on transparency of regular disclosures and crave more quarterly earnings. Reports typically go hand in hand with earnings calls that allow analyst to ask questions of company's executives and that is absolutely true. We actually don't hear from most management teams of most companies that often. The ones that do interviews publicly and come on to YouTube channels and do podcasts are
very, very few. Most company executives are just quiet until the next quarter. That's the only real time that investors can be updated on what's actually happening with the companies. That's the only time that investors get a peek at the financials. And while it's somewhat true, at least the argument sounds reasonable that companies will suddenly become long term focus if they're only reporting every six months. The evidence is not substantial in supporting that view.
There's other places in Europe that require reporting on a six month basis, not on a quarterly basis. And there's virtually no evidence that they make longer term investments or that they invest more in CapEx. In fact, even most recent places where that change has been made, it hasn't changed the direction of company investments. They typically invest just the same. What does change is transparency and opacity into the companies.
They become more opaque. You can't see what's going on with your investment as frequent. You're waiting every six months instead of every three months to get an idea or update of what's happened. In many cases, there could be significant news that could impact the company in between those time points, But you have to wait and find out for month after month what happened. And this also brings another big risk factor into the market.
If a company only reports every six months, that means that investors have less data to price the company accurately, leading to more volatility, more mismatched prices. In fact, every six months means that investors have a much longer time period to wait to identify if anything's wrong. What if a company has a sudden struggle one month in sales? What if there's something impacting the business
negatively? Investors would have to wait far longer for them to legally disclose that than required. So this could also lead to situations where investors are waiting far longer to accurately price in the decline of a stock, creating more volatility in the company. So investors may debate whether or not the regulatory burden is worth the transparency, but I believe it is. I think investors are well served by additional
transparency. Being able to see the gradual performance of a company over time is beneficial in pricing and following a company leaving us to every six months gives us less information to base our investments on. It gives us less contact with management. It gives less insight and confidence to individual
investors. And in terms of the overall performance of our stocks in United States on a quarterly basis compared to those largely popular in Europe that are reporting on a semi annual basis, I think the results speak for themselves. Now that's going to be it for this episode. Hope you enjoyed. See you in the next one.