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Opendoor Technologies Inc. (OPEN) is suffering a decline in premarket today – What are the reasons behind?

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Opendoor Technologies Inc. (OPEN) experiences a decrease of 6.02% in the premarket after announcing the proposed secondary public offering of common stock by selling stockholders. However, the last trading session concluded at $17.76 with a decline of 5.28%.

OPEN Announces Proposed Secondary Public Offering 

An existing shareholder of OPEN has announced the start of a planned registered secondary public offering of 28,000,000 shares of common stock on 13th September 2021. Moreover, the underwriter will have a 30-day option to acquire up to 4,200,000 additional common shares from the Selling Stockholder. The planned offering will not result in Opendoor selling any shares or receiving any profits. Lastly, he proposed offering will not affect the number of shares of common stock.

OPEN Prices Upsized $850 Million Convertible Senior Notes Offering

OPEN announced the pricing of its private offering of $850 million on 18th August 2021. This prize is in aggregate principal amount of 0.25 under Rule 144A of the Securities Act of 1933, as amended (the “Securities Act”). The offering size was raised from the $750,000,000 aggregate principal number of notes originally announced.

Firstly, the original purchasers of the notes were also given the opportunity to purchase up to an additional $127,500,000 principal number of notes for settlement within a period of 13 days from the day the notes were first issued.

Secondly, the notes will represent OPEN’s senior unsecured liabilities, with interest accruing at a rate of 0.25 percent per year. Thirdly, unless repurchased, redeemed, or converted before then, the notes will mature on August 15, 2026. Last but not the least, noteholders will have the opportunity to convert their notes only if specific conditions occur before February 15, 2026.

Second Quarter 2021 Financial Results

OPEN published second quarter 2021 financial results on 12 August 2021.

  • First, $1.2 billion in revenue, up 59 percent from 1- Q21, with 3,481 total houses sold, up 41% from 1- Q21.
  • Second, $159 million in gross profit, up 64 percent from 1- Q21. Gross margin of 13.4 percent, up 40 basis points from 1- Q21.
  • Third, $144 million in net profits vs $270 million in 1- Q21
  • Also, $2.5 million adjusted net income vs ($21) million adjusted net income in 1- Q2
  • Lastly, at the conclusion of 2-Q21, the company had expanded to 39 markets, with 12 new market launches.

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