Opendoor Shares Plunge Following Controversial CEO Compensation Move

Opendoor Technologies Inc. (OPEN) experienced a significant selloff as investors reacted to a contentious warrant distribution program initiated by CEO Kaz Nejatian. The stock declined 5.14% to settle at $8.12, reflecting market concerns about potential shareholder dilution resulting from recent corporate actions.

Mixed financial results for the third quarter of 2025 further contributed to market uncertainty. While revenue reached $915 million, exceeding projections of $850 million, profitability metrics disappointed investors.

The company reported an adjusted EBITDA of negative $33 million, significantly worse than the anticipated negative $24.4 million. Net loss per share came in at $0.08, missing analyst expectations of $0.07 per share.

Anti-Short Strategy Backfires

The real estate iBuyer announced a special dividend in the form of tradable warrants for shareholders holding at least 30 shares as of November 18, 2025. The warrant series—K, A, and Z, referencing the CEO's initials—carry exercise prices of $9, $13, and $17 respectively.

This strategic move explicitly targeted short sellers, who currently hold approximately 25% of the company's freely tradable shares. Nejatian publicly stated his intention to "ruin the night" for those betting against the company.

Should investors sell immediately? Or is it worth buying Opendoor?

Key warrant specifications:
- Series K: $9 exercise price
- Series A: $13 exercise price
- Series Z: $17 exercise price
- All warrants expire November 20, 2026
- Trading under tickers OPENW, OPENL, and OPENZ

Dilution Concerns Overshadow Short Squeeze Potential

Despite an initial surge above $9 following the warrant announcement, substantial selling pressure emerged in subsequent trading sessions. Market participants are weighing the potential for significant dilution from multiple simultaneous sources.

The company is concurrently conducting a convertible notes repurchase through an exchange offer that will increase the number of outstanding shares. Combined with potential warrant exercises if share prices rise, this creates substantial overhang concerns.

Demonstrating confidence in the company's direction, Nejatian purchased 125,000 shares at $8.0365 for a total investment of $1.004 million just before the warrant record date. However, the path to profitability by the end of 2026 remains uncertain amid current market conditions.