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Opendoor in talks to go public

House-flipper Opendoor is in advanced talks to go public through a merger with Chamath Palihapitiya’s blank-check company in a deal that could be valued at $5 billion, Bloomberg first reported. The company was most recently valued at $3.8 billion in a March 2019 fundraising round led by Softbank’s Vision Fund.

  • Old school approach: Opendoor makes an offer to buy a house within 24 hours of an owner expressing interest online. Although the seller gets less money by foregoing a traditional marketing process, the tech startup offers convenience and certainty.
  • Heard on the StreetSteve Eisman told Bloomberg: “Flipping distressed homes is a decent business in a good economy, but it’s a small business at best. Moreover, making offers at fair-market prices is a lot riskier than traditional home flipping… Why would a non-distressed seller sell their home to Zillow or Opendoor? There’s only two possibilities for that. Either, Zillow has mispriced the house, or there’s something wrong with the house.” [Bloomberg]

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