OPEN.US
id: 349
Opendoor (OPEN) Investor Settlement
The settlement terms have been submitted to the court for approval.
$39,000,000
Cash SettlementD. Arizona
Court2:22-cv-01717
Case number12/21/2020
Class period Start11/03/2022
Class period EndOpendoor has reached a settlement with $OPEN investors to resolve claims that it misled them about its pricing algorithm, profit margins, and ability to operate profitably during a market downturn.
Case Details:
On September 19, 2022, Bloomberg reported that Opendoor 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.
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.
Going back to December 2020, following the Merger, the Company has operated a digital platform for buying and selling residential real estate in the U.S, featuring 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 flips those homes to buyers for a profit.
Bloomberg’s findings evidenced the failure of Opendoor’s Algorithm to adjust accurately to changing market conditions. Thus, investors have reason to suspect that the Company, its Leaders and its Advisers have misinformed them about the quality of the algorithm and related business and financial prospects.
The OPEN stock already declined over 80% from the Company’s first post-Merger closing stock price of $31.25 per share on December 21, 2020, seriously damaging investors.
Case Type
US Securities Class Action
Case Status
Stipulative Settlement
Alleged Offence
Misleading Statements,
Financial Misrepresentation,
Failure to Disclose,
Negligence,
Omissions
Suspected Party
Directors,
Management,
Influencer,
Investment Bank,
Service Provider,
Research Entity
Security Type
Stocks
Trade Direction
Long
Payout per Share
0.04
Filing date
12/06/2022
Plaintiffs
Stuart Graham Hereford
Attorneys
Labaton Sucharow LLP
Defendants
Siebert Williams Shank
Judge
Michael T. Liburdi
Administrator
Verita Global
Attorney fee
$10,650,000
Trades matching type
FIFO
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