Great points, but I think there are some key issues you didn't mention. AWS wasn't possible WITHOUT Amazon first giving up many years of profit. The difference, Amazon had a poor bottom line for years because they spent most of that profit on R&D to build infrastructure for future profitability and scaling. The crucial difference here - Opendoor has continually declining profit margins, not because of re-investing or R&D, but because of extremely high COGS. Their cost of selling is getting worse over time. So yeah, the situation on the outside may seem comparable to an early-phase Amazon, but the financials tell a different story. Amazon sacrificed bottom line growth for a better growth down the line. Opendoor has poor bottom line growth, well, because they just don't make much profit. Anytime one looks at earnings reports, I think what is most important is what the reports do not say. Opendoor talked about how their revenue shot up this quarter and YoY (5x), but they didn't at all talk about the fact that the revenue was generated through heavy borrowing - they took out another $5-$6 billion in debt recently and spent just about most of it on purchasing homes. Their assets skyrocketed and, being that their assets are the homes that they sell, their revenue skyrocketed. BUT, its being done with borrowed money. The Amazon equivalent of Opendoor would more accurately be skyrocketing assets funded by their profits, and not debt. At their current and near-future foreseeable pace of margin deceleration, it would take something like 10-12 years to pay off the debt they took out in the last 2 quarters, if they didn't spend a single dime of that profit on anything else. You did mention that maybe a ground-breaking innovation down the road improves their margins, which is possible. But usually these things time a lot of time and a lot of money. Opendoor isn't spending much of their money on R&D or re-investing... and are instead doubling, tripling and quadrupling down on their current model with borrowed funds. Given what I've seen so far, that more likely than not means assets via inventory up, top line up, bottom line continuing to shrink. On a technical level, they've traced a very strong weekly bullish divergences on numerous indicators over the last year, but I see more negative indicator readings and price action behavior than positive. In any case, if you believe in the company, I do see now as a time to be buying more because they have visibly stopped dropping on all chart levels above daily. $6 - $6.50 seems to be a pretty strong bottom point for now, and under different circumstances and in different times, I think a nice rally could even be coming. Unfortunately, being that we're in the midst of a pretty historic decline, its a pretty inopportune time for the market and especially tech. If you're looking for a home-run investment, maybe check out Upstart (UPST). They also have a pretty interesting business model, and one that may have many many applications as they branch out into different markets. And they have some amazing financials with great profit and income.
@@truthteller678 yeah well, nothing is ever a sure bet. Shrinking margins as a result of interest rate hikes hit the lending industry particularly hard. Gotta just take the blows with the wins - i was dead wrong on the long-term potential of this one, but I still did alright on it - got out of my position in the 90s right before the earnings report, and precisely because of the concern about their industry being hit hard. Timing and proper execution are more important than choosing the best winners, and someone's recommendations need to be assessed by that criteria as much as if not more than simply what they recommended. Stock gurus love to talk about how they recommended Amazon 15 years ago, acting as if they recommended it and said to never sell, while not mentioning the other 20 times they said Amazon was a sell or a short. Its the holding period and execution that creates winners, not just picking a 100 bagger that never goes any direction except up from the time that you pick it. Good way to go broke looking for those unicorns
What do y’all think will be Opendoor’s key to high margins?
Welcome back Mike!
Thanks Rhodes!!!! Miss my TH-cam crew! Appreciate the love! I’ll be back here weekly 🤙🏼
Great video. Keep it up!
Thanks Sofia!!! Glad you enjoyed it :)
They're not at $1 a share. They are prices for bankruptcy at this point.
Are you holding now?
He is baaaack 🚀🚀🚀🚀
I’m baaaaaack :)
can you give price target pls
Coming a week from Monday. I’ll be talking competition Monday at 6:30pm ET
Great points, but I think there are some key issues you didn't mention. AWS wasn't possible WITHOUT Amazon first giving up many years of profit. The difference, Amazon had a poor bottom line for years because they spent most of that profit on R&D to build infrastructure for future profitability and scaling. The crucial difference here - Opendoor has continually declining profit margins, not because of re-investing or R&D, but because of extremely high COGS. Their cost of selling is getting worse over time. So yeah, the situation on the outside may seem comparable to an early-phase Amazon, but the financials tell a different story. Amazon sacrificed bottom line growth for a better growth down the line. Opendoor has poor bottom line growth, well, because they just don't make much profit.
Anytime one looks at earnings reports, I think what is most important is what the reports do not say. Opendoor talked about how their revenue shot up this quarter and YoY (5x), but they didn't at all talk about the fact that the revenue was generated through heavy borrowing - they took out another $5-$6 billion in debt recently and spent just about most of it on purchasing homes. Their assets skyrocketed and, being that their assets are the homes that they sell, their revenue skyrocketed. BUT, its being done with borrowed money. The Amazon equivalent of Opendoor would more accurately be skyrocketing assets funded by their profits, and not debt. At their current and near-future foreseeable pace of margin deceleration, it would take something like 10-12 years to pay off the debt they took out in the last 2 quarters, if they didn't spend a single dime of that profit on anything else.
You did mention that maybe a ground-breaking innovation down the road improves their margins, which is possible. But usually these things time a lot of time and a lot of money. Opendoor isn't spending much of their money on R&D or re-investing... and are instead doubling, tripling and quadrupling down on their current model with borrowed funds. Given what I've seen so far, that more likely than not means assets via inventory up, top line up, bottom line continuing to shrink.
On a technical level, they've traced a very strong weekly bullish divergences on numerous indicators over the last year, but I see more negative indicator readings and price action behavior than positive. In any case, if you believe in the company, I do see now as a time to be buying more because they have visibly stopped dropping on all chart levels above daily. $6 - $6.50 seems to be a pretty strong bottom point for now, and under different circumstances and in different times, I think a nice rally could even be coming. Unfortunately, being that we're in the midst of a pretty historic decline, its a pretty inopportune time for the market and especially tech.
If you're looking for a home-run investment, maybe check out Upstart (UPST). They also have a pretty interesting business model, and one that may have many many applications as they branch out into different markets. And they have some amazing financials with great profit and income.
Upstart hasn't looked so good. It dropped how much in one day?
@@truthteller678 yeah well, nothing is ever a sure bet. Shrinking margins as a result of interest rate hikes hit the lending industry particularly hard. Gotta just take the blows with the wins - i was dead wrong on the long-term potential of this one, but I still did alright on it - got out of my position in the 90s right before the earnings report, and precisely because of the concern about their industry being hit hard. Timing and proper execution are more important than choosing the best winners, and someone's recommendations need to be assessed by that criteria as much as if not more than simply what they recommended. Stock gurus love to talk about how they recommended Amazon 15 years ago, acting as if they recommended it and said to never sell, while not mentioning the other 20 times they said Amazon was a sell or a short. Its the holding period and execution that creates winners, not just picking a 100 bagger that never goes any direction except up from the time that you pick it. Good way to go broke looking for those unicorns
Pls raise open door related video
More coming :)
Forgot about this channel.
I’m backkkkkkk! Weekly videos coming back! Haven’t forgot about you arcane!
Yes 3times go fast 10 times i think
Thanks Kiki! Glad you enjoyed the content 🤘🏻
Still buying?
a lot
@@MikeKelleyCo me too!
Another "trust me bro" on TH-cam.
😂
What now?
Insta-buy.
@@MikeKelleyCo ok!
pump and dump
with a beard like that, pretty sure you're legit. just sayin.
HA! Thanks Jonathan 🤘🏻🤘🏻every inch longer = more wisdom
@@MikeKelleyCo can't trim until it's at ATH !
@@liarzdice yeeeee haw!!!! Liarzdice is back. Miss ya homie but how the ef was I supposed to know it was the top? You think I got a crystal ball?! 🤪