What's Behind Opendoor Technologies' Rally? Is Meme Mania Back?

The term "meme mania" emerged when companies with no apparent reason to rally began to reach stratospheric valuations, making millionaires overnight with no connection to their fundamentals. Four years later, this meme stock sentiment is starting to resurface. However, there is one main difference in the stocks that were targeted by retail traders to run up in late July 2025.

A summer boom has come to hit shares of Opendoor Technologies Inc. (NASDAQ: OPEN), as the stock has rallied by as much as 350% over the past month alone. The reason for the rally is simply an influential move happening across small-cap stocks, with shares of Kohl’s Corp. (NYSE: KSS) also joining this hype cycle in a one-week rally of 41% of its own.

While Kohl’s and other previous “meme stock” manias had little to no foundations to be sustained into the future, there are reasons to believe that Opendoor stock might be a different case in the coming months, considering its exposure to the technology sector and usage of artificial intelligence within the real estate brokerage industry.

Opendoor: Revolutionary Product or Fluke?

It is too early to tell whether Opendoor can justify this aggressive appreciation in market capitalization; however, some views argue that the company's future is bright enough to at least keep the stock near its highs for a little while longer.

The real estate brokerage industry has experienced minimal change or disruption over the past few decades. Opendoor is looking to change that by eliminating most (if not all) middlemen in the process of buying and selling homes across the United States. One way to check for this progress is the company’s key performance indicators (KPIs) themselves.

When investors examine Opendoor's latest quarterly financial results, they can see that this is not as much of a “meme stock" as its recent price action would suggest. This business model has already undergone 2,946 real estate transactions, generating as much as $1.2 billion in revenue for the latest quarter.

Furthermore, the company’s inventory balance closed at $2.4 billion, driven by 7,080 homes on the platform, representing a 26% increase compared to the same quarter last year. These are not the sort of inventory numbers or revenue figures that would be tied to a meme stock, per se, so investors shouldn’t be so quick to dismiss Opendoor just yet.

More than just being a real estate technology company, Opendoor also operates as a real estate investment fund, as most of its assets on the balance sheet are represented by actual real estate inventory. Considering that home sales and mortgage data are closer to the bottom of the cycle than anywhere else, this could be a significant driver of appreciation.

Another Short Squeeze Run?

One main characteristic of these meme stocks is that they carry a high short interest as a percentage of the overall share float in the market. Therefore, if an aggressive up move happens (such as it recently has), then these short sellers could be forced to close their positions and cut losses, which involves buying back the stock.

That additional buying pressure could also incentivize new buying, whether from a mass of retail traders or even some institutional buyers who can justify a more fundamental thesis behind a small stock like Opendoor. As of July 2025, Opendoor’s short interest represented up to 19% of the entire company’s float.

Translated into dollar terms, this percentage of short float would mean that up to $72.4 million is currently being held in short positions for Opendoor stock. This significant amount could trigger buying pressure if the short squeeze event ultimately occurs.

Now, considering that Opendoor has some decent fundamental figures in its business model, as seen in the quarterly results, it shouldn’t come as a surprise to investors to notice some institutional buying. As of the most recent quarter, Opendoor stock reported up to $290,000 worth of institutional buying, in addition to the $27 million purchased last quarter.

Within that $27 million, investors can find those from the Vanguard Group getting involved as early as May 2025. After a boost of only 0.4% in net holdings, Vanguard now holds a net position worth up to $87.9 million to own 12% of the entire company.

This isn’t a common stance for an asset manager as large as Vanguard, which indicates they must see the potential in this real estate venture as well as the opportunity for stewardship to foster a bigger business opportunity, given how much of the company they now own, making them an activist holder.

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