San Diego, CA -- (SBWire) -- 10/26/2022 --An investor, who purchased shares of Opendoor Technologies Inc. (NASDAQ: OPEN), filed a lawsuit over alleged violations of Securities Laws by Opendoor Technologies Inc. in connection with certain allegedly false and misleading statements made between December 21, 2020 and September 16, 2022 and in connection with the business combination between the Company and Opendoor Labs Inc. ("Legacy Opendoor") completed on or about December 18, 2020 (the "Merger").
Investors who purchased shares of Opendoor Technologies Inc. (NASDAQ: OPEN) have certain options and for certain investors are short and strict deadlines running. Deadline: December 6, 2022. NASDAQ: OPEN investors should contact the Shareholders Foundation at mail@shareholdersfoundation.com or call +1(858) 779 - 1554.
Tempe, AZ based Opendoor Technologies Inc., formerly known as Social Capital Hedosophia Holdings Corp. II ("SCH"), operates a digital platform for residential real estate in the United States. Social Capital Hedosophia Holdings Corp. II was a special purpose acquisition company, also called a blank-check company, which is a development stage company that has no specific business plan or purpose or has indicated its business plan is to engage in a merger or acquisition with an unidentified company or companies, other entity, or person.
On September 15, 2020, the Company, then still operating as SCH, and Legacy Opendoor, a private company operating as a digital platform for residential real estate, announced their entry into a definitive agreement for the Merger (the "Merger Agreement"), which valued Legacy Opendoor at an enterprise value of $4.8 billion.
On October 5, 2020, the Company filed a registration statement on Form S-4 with the United States Securities and Exchange Commission ("SEC") in connection with the Merger, which, after several amendments, was declared effective by the SEC on November 27, 2020 (the "Registration Statement"). On November 30, 2020, the Company filed a proxy statement/prospectus on Form 424B3 with the SEC in connection with the Merger, which formed part of the Registration Statement (the "Proxy" and, together with the Registration Statement, the "Offering Documents").
On December 18, 2020, pursuant to the Merger Agreement, the Company, among other things, deregistered as a Cayman Islands company, registered as a Delaware company, changed its name to "Opendoor Technologies Inc.", and consummated the Merger, whereby, among other things, Legacy Opendoor became a wholly owned subsidiary of the Company.
Following the Merger, the Company has operated a digital platform for buying and selling residential real estate in the U.S. The Company's platform features 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 flip those homes to buyers for a profit.
On September 19, 2022, citing a review of industry data, Bloomberg reported that the Company 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. Worse, a 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. Bloomberg's findings evidenced the failure of Opendoor's Algorithm to adjust accurately to changing market conditions.
Shares of Opendoor Technologies Inc. (NASDAQ: OPEN) declined to as low as $2.31 per share on October 17, 2022.
The plaintiff alleges the Offering Documents for the Merger were negligently prepared and, as a result, contained untrue statements of material fact or omitted to state other facts necessary to make the statements made not misleading and were not prepared in accordance with the rules and regulations governing their preparation. Additionally, the plaintiff claims that the Defendants made materially false and misleading statements regarding the Company's business, operations, and prospects.
More specifically, the plaintiff alleges that the Offering Documents and that between December 21, 2020 and September 16, 2022, the Defendants made false and/or misleading statements and/or failed to disclose that the algorithm ("Algorithm") used by the Company to make offers for homes could not accurately adjust to changing house prices across different market conditions and economic cycles, that as a result, the Company was at an increased risk of sustaining significant and repeated losses due to residential real estate pricing fluctuations, that accordingly, Defendants overstated the purported benefits and competitive advantages of the Algorithm, and that as a result, the Offering Documents and Defendants' public statements December 21, 2020 and September 16, 2022, were materially false and/or misleading and failed to state information required to be stated therein.
Those who purchased shares of Opendoor Technologies Inc. (NASDAQ: OPEN) have certain options and should contact the Shareholders Foundation.
Contact:
Shareholders Foundation, Inc.
Michael Daniels
3111 Camino Del Rio North - Suite 423
92108 San Diego
Phone: +1-(858)-779-1554
Fax: +1-(858)-605-5739
mail@shareholdersfoundation.com
About The Shareholders Foundation
The Shareholders Foundation, Inc. is a professional portfolio monitoring and settlement claim filing service, , which does research related to shareholder issues and informs investors of securities class actions, settlements, judgments, and other legal related news to the stock/financial market. Shareholders Foundation, Inc. is in contact with a large number of shareholders and offers help, support, and assistance for every shareholder. The Shareholders Foundation, Inc. is not a law firm. Referenced cases, investigation, and/or settlements are not filed/reached and/or related to Shareholders Foundation. The information is provided as a public service. It is not intended as legal advice and should not be relied upon.
NASDAQ:OPEN Investor Notice: Lawsuit Alleges Securities Laws Violations by Opendoor Technologies Inc
A lawsuit was filed on behalf of investors in Opendoor Technologies Inc. (NASDAQ:OPEN) shares over alleged securities laws violations.