The Rundown - How Opendoor Can Become the 'Google of Housing' | Eric Jackson

Episode Date: August 24, 2025

Can Opendoor make the leap from meme stock to the 'Google of housing'? Eric Jackson, Founder at EMJ Capital, makes the bull case for Opendoor as the future of housing marketplaces. He breaks down what he sees as the big mistakes of the former CEO he helped push out, why management has been asleep at the wheel & needs to have more skin in the game, and what it will take to turn things around. Jackson argues Opendoor must reinvent itself as an AI-first real estate company, and he points to Palantir’s Alex Karp as the model for how to win over retail investors.This video is for informational purposes only and reflects the views of the host and guest, not Public Holdings or its subsidiaries. Mentions of assets are not recommendations. Investing involves risk, including loss. Past performance does not guarantee future results. For full disclosures, visit ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Public.com/disclosures⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠.

On today's show, we are talking to Eric Jackson, the founder of EMJ Capital, and a big fan of Open Door. Thanks for being on the show today, Eric. Great to be with you, Zane. Well, we got to talk about Open Door, obviously. It's making a lot of buzz recently over the past few weeks. I think you're a big reason for that. Your viral tweet back in July talked about how Open Door has a potential to be a hundred bagger. so and that kind of put Open Door on the map for a lot of investors, especially retail investors.

Yeah. So for the listeners, can you talk through your bullcase for Open Door and where you see the future of the company? Sure. Well, it's changed. You know, when I initially tweeted on July 14th about it, I was thinking of it as a comp to Carvana. And so Carvana, most people know now, like it's online, you know, eComber. way of transacting with you know for used car and we've most of us have seen the the big vending machines you know on the on the interstate for Carvana or they or they bring it to your house and kind of on a flatbed and drop it in front of your house they were like a go-go growth stock from like 2017 until like 2021

growing like crazy went to four hundred dollars a share from like an initial IPO price of like 10 bucks or 15 bucks something like that and And then they went down from $400 to $3.50 in December 2020. And now come all the way back to $400. And so obviously, like, they were plagued by a lot of debt. There were some questions about how they could survive the, you know, the rapid hike and interest rates. And people, obviously, a lot of people didn't think they'd make it. But they did.

And they had a great management team. They sort of bet on themselves. They kept grinding away. They changed from like a growth at all cost mentality to profitability focus. And it turned out that their value proposition was resonating. And they're in a big fragmented market where they're disrupting the traditional, you know, card dealerships. And they're scratching away and kind of growing, you know, getting more and more market share,

kind of almost like same playbook as Tesla. Tesla is now up to like 10% market share nationally. So Open Door is sort of trying to do the same thing. except being an online platform for real estate, you know, buying and selling your house as opposed to your cars. So it's a bigger ticket item, obviously. But, you know, when it works, it's the same kind of value proposition, sort of quick and easy, disrupts the traditional agents. Why am I paying this agent, you know, 35 grand to sell my house when they, you know, basically, you know,

got a lead off of Zillow or something for it? And they have had to kind of raise a lot of debt. There were questions, you know, the IPO through a SPAC in 2021, I think it was. And, you know, had a similar kind of downfall like Carvana going from 39 bucks as an all-time high to as late as just June 25th. They were at 51 cents. And yet, you know, when I looked at them, you know, back, you know, in June, July. Why, to me, it seemed like they were just at the point where they were starting to make the turn similar to kind of what I saw in Carvana. And Carvana, I'd followed a lot on the way up and down and then up again.

And I did get into them, Carvana at $15 a share, not $3 and $0.50. And it kind of rode that up quite a quite a ways. And made a big deal about it. I was on CNBC, you know, in June, 2023, when they were like $24. And I was sort of like banging the drum saying, you know, this is a great company. Our AI model spotted it. You might want to like pay attention to this. And I was kind of, you know, got a lot of skepticism from the host when I was interviewed

about it. Afterwards, like the producer said, we don't want you to talk about names like Carvona on CNBC anymore. People only care about the Mag 7. They only want to hear about Tesla and Nvidia. You know, we don't want these like little names that nobody's ever heard of and pay attention to. And there certainly wasn't, it wasn't a meme stock.

And it wasn't, nobody was looking for the next carbana like they are now because nobody thought a carbana was possible to go from 400 to 3 to back to 400. So Open Door anyway, like is sort of the opportunity to get it right from the bottom to the top, or at least that's what I initially saw on July 14th. And I simply looked out and saw that in three years from now in 2028, you know, if you looked at what they should be doing from a, from a top line revenue perspective. And then you sort of looked at like what, what does Carvana get from a multiple perspective? You know, it, it looked like an $82 a share was more reasonable, not the 51 cents or the 80 cents when I was

looking at it. And that's sort of how I constructed my original argument, put it out there, and it seemed to resonate. And, you know, it started snowballing since. Now, I've since learned more about the company. I have sort of like updated thoughts, but that's initially how it happened. Right. So you thought it was going to be a Carvana 2.0. Now you're thinking, I think I saw you heard, I heard your comments talking about how they could potentially be a Airbnb model, asset light. You also call them the Google for housing, which kind of sounds like what Zillow is. Can you talk me through what you've learned about the company now and what your updated thinking is? Sure. So Google for housing, Airbnb for housing, Uber for housing, I think are probably like all those. Those three are the best way to think about it. Like, if you think about all those examples, I mean, they've all come in and kind of e-commerceified some area that, you know, tradition. Don't we have that with Zillow though?

Isn't that with Zillow? People go on Zillow and look for a house or potential houses for sale in the area? Buyers go on to Zillow. Right, right. Sellers go on to Open Door. And the difference is between and sort of sellers are the key. Sellers are the reason what where like the, the value. of the kind of all the transactions that flow from there come from.

So it's sort of the sellers are important and that's why Zillow is not as positioned as well as an open door. Why is Google valued the way it is? It's because of search intent. It's because what you and I go and we want to find something out and from that intent, Google's able to build this two and a half trillion dollar company basically and they've they've sucked up like 38% of the total global online ad market, you know, they gobble that up. And so it's, it's, because when I go go to Zillow and I'm just like, what's my house worth, you know, or what's going on? Like, what are you daydream about buying, you know, a mansion in San Diego? I mean, I've been there.

Yeah. So it's, it's, it's an ad-based model. It's also like they pass you off to an agent, traditional agent, right? So, and then I'm back in the whole traditional agent world. With Open Door, I'm going there with the, you know, I want to sell my house. I want to know what my house is worth. And what's interesting about Open Door is that they can tell you, you know, we will pay you this amount. You know, maybe I think it's my house is worth $400,000. I'll probably go on to Open Door and I'll get an offer for it. I can, we can send you $375,000 for your house guaranteed in 45 days.

It'll be wired into your account. You have that certainty of knowing that that's the case. Now, they can, you know, and then, and then, and sometimes they've stepped up and they've, they've had to kind of be the eye buyer that actually buys the house at that level, thinking that, you know, we'll be able to flip this thing in a few weeks or months, hopefully, for $400,000. And so we'll, and we'll get this off of our balance sheet. And there are a lot of people in America where that, you know, they need speed.

They need certainty. And they don't want to just put their house up for a listing with an agent. for six months or eight months or some indeterminate period. So that is a core value proposition. Now, Open Door recently has sort of made a push where, hey, let's partner with agents. And then, like, let's talk to agents and see if they can do better than 375K for this for Eric. And if they do 425K, hey, I do better. I sell my house, again, in that 45-day period.

and Open Door makes a little bit more money because they share in the agent commission that gets generated from that referral. So what's really interesting, though, in this sort of new approach is that the reason why a lot of people hate Open Door is because of all the debt and because of the eye buying. And they say, this isn't a business model that works. Nobody can make money off of it. Zillow got out of the business to just go back to ads. Redfin got out of the business to go back to brokerage. Why should we, you know, you know, support this kind of business? They can go to a pure Airbnb asset light model. Airbnb doesn't own any of the houses it owns.

Why is it valued so much? Why is it valued in the billions of dollars? Because they have the brand trust with people, you know, both the people that are interested in renting the places and the people that want to list their places as that interface. Well, they're a marketplace, though, right? They're a marketplace connecting buyers and sellers. That's what Uber is, connecting riders and people that want to,

people that need to ride. is that what you see open door being like a marketplace? Absolutely. There's nobody who's taken up the mantle for real estate, which is a $20 trillion residential real estate, $20 trillion market in the U.S. alone. 14 trillion of those $20 trillion are people that have mortgages tied to their homes. That's an enormous market.

It's way big. And if you go international, which they probably should, after they perfect things here in the U.S. Like, it's obviously like multiples of that. But there's nobody who's become the Airbnb for that residential real estate market, the Uber for that residential real estate market. Open Doors perfectly positioned to do that. The prior management and board have been asleep at the switch

and allowing this company just to die on the vine down to 51 cents, allowing the prior CEO to dump shares on retail shareholders at 56 cents a share. Probably, you know, if the people that ran Rocket mortgage, had a brain. They probably would have scoop this thing up for 80 cents a share. I bet you the board for Open Door would have signed off on it. I bet you they would have slapped each other on the back and said, boy, that was a tough one. Woo! Glad we got that mess off our hands. And nobody on CNBC, nobody in the Wall Street Journal would have written a story saying, this is a travesty. The Airbnb for housing just got sold for 82 cents to Rocket mortgage. And they probably would have been embedded

in Rocket. Rocket wouldn't have known what to do with it. because all they do is sell plain vanilla mortgages anyway. They don't have the same kind of trusted relationship with the sellers, which is the key here. And, you know, nothing would have happened when we would never have had this Airbnb, sorry, Airbnb interface for this such, this massive real estate market. I want to talk about some of the mistakes that the management made over the last two to three years. The previous CEO, Carrie Wheeler, she stepped down. You weren't a big fan of hers, like you just said.

can you walk me through some of the biggest mistakes the previous management made over the last few years and what you want to see in the new CEO that's that's going to take over? Well, it's easy to compare them to Carvana. And one of the things that was really special about Carvana is that in 2022, when their stock was melting down from $400 to $3.50, the CEO and founder, Ernie Garcia Jr., bought himself $70 million, that's $7,0 worth of Carvana stock at that price, you know, in 2022, as it was sort of declining. So that's, I don't care what anybody says, you know, oh, he's rich, you know, like that's not, you know, even for a rich guy, that's not couch cushion change,

you know, that he's putting into this stock. This is, that's real money. And nobody, and, you know, most executives are just, just use their options in stock just, like, like as ATM machines to dump, you know, and like buy their new cottage or the second house or their fourth house or whatever it is. Whenever people, insiders buy, you got to sit up and take notice because nobody buys to set money on fire. What was also interesting is that they had two junior management people on the Carbana management team. One guy who's a chief product officer, Dan Gill, who bought two million dollars worth of stock in Thanksgiving 2020 at $7.50. cents, another guy who bought $700,000 worth of Carvana stock, you never see, you know, second tier management people like that, spending that kind of money.

Like if I went home and I told my wife, after my stock, my whole compensation is tied up in this one company effectively, right, you know, affecting my wife, my family, my kids. And the stock's gone from 400 to 7 bucks in a year and a half. Okay. And now I go home around the kitchen table after the kids go to sleep, I say, honey, you know what I want to do, I want to take $2 million of our money and stick it in this stock that all your friends are telling you at the club is going down the toilet and it's going to go bankrupt. Is that okay with you? You know, that, I don't know about you and your wife,

but like that would be a tough. That'd be a tough conversation, yeah. You know, and Dan Gill, to his credit, she brought our officer, won that argument out. So you knew that these guys believed. So anyway, there's been no, there's been no buying at Open Door. Carrie was a corporate finance person. She came up through Goldman Sachs, TPG. She was the CFO at Open Door after coming in off the board. And she was sort of like right place, right time where like, you know, the prior founder left. You know, worry, concern, angst.

Like they bought all these houses in 2021 that were worth like, you know, a lot less than they paid for them. And they're stuck on their balance sheet. So she sort of stepped up, you know, to her credit, she steadied the ship. I mean, she's done some things like make a push into the. sort of asset light marketplace. But, you know, she's not a tech person. She's not a finance person. And to move forward, this company has to totally re, re, you know, revolutionize themselves

effectively as an AI first company. What does that look like? What does an AI first real estate marketplace company look like? Well, in terms of the people that work there, they got to have a tech background. They got to have an AI experience. I mean, all the best AI people that Open Door had left to go work at Meta and OpenAI. So you've got to have the best and brightest there who really think, hey, I want to be part of, you know, the Airbnb for U.S. residential real estate here. And that's-

But what does AI look like? Is it just helping with inspections or better valuations and offers to when it comes to buying a house? But you're not even going to be doing that anymore because you're trying to, the company's trying to pivot to an asset light model. What does AI look like in a real estate company besides like the obvious stuff of like, you know, helping with, you know, like paperwork and data entry, things like that. What makes, how would you stand out? Like, what would you do? They have to make the whole process faster and cheaper and, you know, more pleasurable than it is now.

They have to move from like a 45-day close to, you know, one-day close or two-day close, three-day clothes. They have to have lots of partners, obviously, you know, buyers who can, they have to, you know, they have to have people that actually buy the houses that will kind of make that initial kind of lower bid offer. that they give somebody at least the price certainty that they know that this thing can can be sold for X, whatever it is. And they have to have partners like agents or whoever to potentially kind of work with them. They need to go after the and push in a political perspective for something called assumable mortgages. These are mortgages now, which only are applied to like 20% of the mortgages out there. They're mostly VA related.

where if you have a 3% mortgage today and you want to move from Houston, Texas to, you know, Raleigh, North Carolina, you can port your mortgage with you. You don't have to, like, give up your 3% mortgage and get a 7% mortgage in Raleigh. Why not make that national? You could do that today. Donald Trump could do that today. Bill Pulte could do that today with no inflationary effects. And that would, yeah, that would unlock the housing market because the reason the housing market is frozen because no one wants to move because the mortgage rates are too high. Yeah, that would be a big.

And it would dramatically lower the cost of housing because essentially you have more buyers and sellers out there, able to transact, interested in transacting. So if, you know, is there anything more important than U.S. home affordability for any of these politicians these days? I mean, come on. I mean, it's all about cost of living and there's nothing that costs more than housing. So that's an easy win for the, you know, for the Trump administration to get behind. So they need to push for that.

I mean, that's not AI in itself, but assuming like they got that permission, So then you have like obviously much more volumes that you've got to process much more quickly. There's things like borrowing against your crypto. You know, they should allow people to, you know, that maybe don't qualify to bank today for a mortgage. But they, you know, they bought a bunch of Bitcoin back in 2018. And they should be able to borrow against that. They don't want to sell it because they think Bitcoin's going to go to the moon still. But why not be able to borrow against that in buying house?

Why not be able to transact? Well, a skeptical person would say like, you're already dealing. I mean, they already got screwed when they bought in houses at a higher price and then they're stuck with them on the balance sheet because of pricing. The prices for the houses came down. Now you let someone borrow against crypto. That's a volatile asset right there. Way more volatile in the housing market. You let people borrow against crypto.

You don't know with the crypto industry. You know what I'm saying with the crypto market? It could have a 20% drop overnight. Now what does that look like? Doesn't that put the company at even bigger risk than what they have, what they're facing today? no. I mean, these are all manageable problems. I mean, I said like, again, like, does Airbnb take any risk? You know, is there, you know, is there, you know, is there is there is there is there is more. I'm still a little confused about that though because like I know what you're, I know what you want to go asset light. But if you just want to be a marketplace, then all, all what, all what really matters is is the housing market improve and there's more there's more there's more transactions. I'm still a little confused on like connecting the buyers and sellers because I mean, you know, if you're a seller, you're looking for a buyer. I mean, you go through an. agent right now. You want to be the agent that kind of does the transaction in the middle. So I guess you're saying you would have a pool of buyers and a pool of sellers and you're

connecting them to. So it's the pool of, I'm just trying to understand how that's any different than what the situation we have today. Like, that's what we have right now. The only difference is that we have a real estate agent in between. But I'm still a little, like, I'm still, I'm still not, I don't have clarity on how you see that working. Like, how much more efficient is getting your Uber versus calling you a local cab company. in the old days. I mean, it's obviously, like, way more efficient to dial it up on your phone. But it's a lot.

So you would have, you would need the, you would need to have like a big pool of buyers and sellers in order to, in order to make this happen. Absolutely. You got to be the dominant player. You got to be the big dog. And, and they have that ability. The mantle is sitting there for them to pick up because, again, it's all about seller. sellers and seller intent and that they have that and rocket mortgage doesn't have that the banks don't have that do you are you saying you partner with uh private equity or these some of these

big firms and try to come in and be buying in some of these houses they they get one and a half million requests a year for firm offers on houses today okay so i think that puts them like less than 1% of the annual transactions in the U.S. But that's way more than anybody else. And that's the mother's milk here. Okay, that's the mother. So then, you know, everything flows from there. How do we architect a marketplace, an Airbnb that takes advantage of that constant, you know,

as long as we, you know, why did people advertise on Google? It's because they got the people going there, we're typing searches in the search bar. You know, so everybody will beat a path to your door if you've got. that huge inflow of interest and intent and everything flows from there and nobody else has that so they didn't realize they had that so you're saying like what was the problem with care i don't think she realized you know what they have i don't think the board realized the potential here and so i don't think they ever thought like Airbnb of real estate oh what's that we're just trying to survive here you know like oh gosh you know we're just i buying our way into oblivion here so i i just think it's

it's an enormous opportunity. I think the stock market agrees with me. And I think that's why it's around four bucks today and not 51 cents like on June 25th. But they got to pick the right CEO now. And they have to like be a little bit more responsive than they happen to the retail shareholders who've seen all this vision way ahead of anybody inside the company. Do you think that it's important for whoever the next CEO is to have good communication and like a relationship with retail investors?

Kind of like what GameStop did with Ryan Cohen. and he kind of embraced the whole meme stock nature of the company. Do you see that as an important thing to do for the company moving forward? 100%. I don't think Ryan Cohn's the poster child for how Open Door should act. I think he's actually been a terrible steward of that business. I mean, to be frank, I think that is a terrible business. I mean, you couldn't pay me to buy GameStop stock.

Like, why would I want to own? that business. You know, it's a terrible retail business and there's plenty of other more interesting Bitcoin treasury businesses. So I don't think he's done a great job. I think the model is Alex Karp at Palantir. I think they're the stock that I think before Open Door was the number one retail loved stock. And, you know, and it's been that way basically since the IPO five five years ago. And I, you know, I checked this morning and they're basically trading now at 73 times next year's revenues. And everybody goes on and complains and says, oh, this is madness and this is nuts. What CEO in America wouldn't want the kind of love and support that Palantir is received

from retail? And Open Door now, I would argue it's probably surpassed Palantir as the number one beloved retail stock. And yet there has been like silence from the existing management team and board towards this love. It's kind of bizarre. I mean, I have people emailing me or DMing me privately every day, including like yesterday last night from Nepal, Antarctica, Afghanistan, you know, Pakistan, Ghana, Nicaragua, Guatemala, New Zealand, Malaysia, Indonesia. Open Door does no business any of these countries. They only do. operate in the U.S. And yet these people around the world, China, like they own this stock.

I was told like there's some like huge hugely popular China, you know, Netizen open door group sitting around talking about like how this was like such a massive opportunity. And there's nothing more American than like gross stocks, crypto and real estate. So like of course it was going to be successful because it combines all three of those. So anyway, I just, it's a golden opportunity. It's sitting there in front of them. To this point, they've really only trampled over it. And we're kind of doing it in spite of them, not with them.

Imagine if they actually locked arms with us the way that Alex Karp does, does video earnings calls, takes questions during earnings calls from retail. I mean, I told Adam Bain, who's the former head of sales for Twitter, who's now on the board, he's a venture capitalist now, I told them before the earnings call, the last one that Kerry did. You have to do the same things that Alex Karp does. You've got to take advantage of this opportunity. either Adam didn't pass it along or Kerry ignored it.

They did the traditional hide behind an audio-only earnings call, 30 minutes in and out. It was just abysmal, and that's why she's gone. Are you trying to get on the board? I am. Okay. I'll end with this. You mentioned crypto briefly there, crypto treasury companies. Do you see that?

You even said that they should consider buying Ethereum. I'm kind of curious to how buying Ethereum. helps, you know, open doors core business, besides adding another buzzword to the company, you know, a crypto treasury company. Well, I'm, I have a bias. Like, I'm very bullish on both Bitcoin and Ethereum. I'm more bullish on Ethereum. I believe that all corporations, large and small, you know, up to Apple, should be buying

Bitcoin and Ethereum and putting it on their balance sheet because it will create massive value for their shareholders over time. So it makes sense rather than just having. cash sitting there somewhere in a bank account. And a lot of these companies, including Open Door, would get, you know, basically zero percent, you know, rates to kind of borrow money to do this if they wanted to. So I do think it's, I do think it's a positive for the company in terms of increasing value.

Is it the core part of their business? No. But, I mean, I just think everybody should do it. I wasn't sure if you had some, like, creative, I don't know, some sort of ETH lending, mixed with stable coins. there's some sort of like 40 chess move in the background. I mean, obviously, I get like hundreds of ideas every day from all these retail investors, and which is, and I, and the good ones, I try to pass on to open door management.

And, you know, yeah, I've got, I mean, there's always the people that are telling me, like, I've got to put every real estate transaction on the blockchain. And, you know, I got to be able to transact in ETH. If I could buy my house in ETH, that would be like the greatest thing ever. Maybe, I don't know. I mean, if you can make money from it, hey, I'm all for it. Yeah. Well, Eric, this was an awesome.

conversation. Clearly, you're very passionate about this. You're making a move to be on the board. And that's what we love to see, all the passion. So thank you for being on today. And I'll be keeping an eye on the stock, no matter what, for sure. Thanks. Great to be with you.