Another Softbank great idea.
Opendoor is cutting 35% of its employees
31–40 of 58 posts
Re: Opendoor is cutting 35% of its employees
#32All the ibuyer companies won't make it. Nationwide downturn in house prices and all the inventory these companies are holding are underwater. Zillow and Redfin are more than likely done. Zillow maybe holding 60,000 homes. We never learn our lesson. GE was taken out by their financial division and high risk bets.
Zillow just sold a house in my neighborhood they had for almost a year at a $40k loss. It sold for about $75k less than when Zillow first tried to sell it.
The house itself is very odd and the outside materials don't match the rest of our neighborhood. It was renovated poorly and looks weird but Zillow bought it anyway.
Re: Opendoor is cutting 35% of its employees
#33Damn, this list keeps growing and growing ... https://layoffs.fyi/tracker/
Re: Opendoor is cutting 35% of its employees
#34Companies with marginal business models are going to get slaughtered in the next year. Carvana, Opendoor are probably the most well known of these companies. Opendoor's business model was super questionable from the get-go: who's going to sell you their home for less than market value? How can you then do something to turn that around and profit without basically turning the company into a giant high-risk flipping en…
https://stratechery.com/2016/opendoor-a-startup-worth-emulat...
This is an amazing read, and I still think it is a worthy model, during stable times.
Re: Opendoor is cutting 35% of its employees
#35All the ibuyer companies won't make it. Nationwide downturn in house prices and all the inventory these companies are holding are underwater. Zillow and Redfin are more than likely done. Zillow maybe holding 60,000 homes. We never learn our lesson. GE was taken out by their financial division and high risk bets.
“ Nationwide downturn in house prices” there’s nothing certain about that happening. Look at 2001. It may.. but all the free money being thrown will prop up prices some. Plus supply in the tank because people aren’t moving. https://www.calculatedriskblog.com/2018/06/real-house-prices...
Lenders have already tightened up loan requirements which will decrease the demand part of the equation. It is the same thing that happened during the great recession. People may want to buy, but have no ability to do so. There's also the high unemployment rate and foreign investors liquidating inventory for capital because their country is also going through a downturn. All the ibuyers have stopped purchasing. If the stock market drops, 10% of buyers who use their 401k or IRA for their downpayment will probably dry up.
I don't see any situation where the housing market doesn't drop.
Re: Opendoor is cutting 35% of its employees
#36Companies with marginal business models are going to get slaughtered in the next year. Carvana, Opendoor are probably the most well known of these companies. Opendoor's business model was super questionable from the get-go: who's going to sell you their home for less than market value? How can you then do something to turn that around and profit without basically turning the company into a giant high-risk flipping en…
https://stratechery.com/2016/opendoor-a-startup-worth-emulat... This is an amazing read, and I still think it is a worthy model, during stable times.
> As interest rates rise or housing prices fall
Well that aged like milk.
Re: Opendoor is cutting 35% of its employees
#37All the ibuyer companies won't make it. Nationwide downturn in house prices and all the inventory these companies are holding are underwater. Zillow and Redfin are more than likely done. Zillow maybe holding 60,000 homes. We never learn our lesson. GE was taken out by their financial division and high risk bets.
That’s mainly due to irresponsible monetary policy by the Fed. Imagine if the benchmark rate was 10%. A lot of the indebted would default/go bankrupt, but it would also incentivize companies to save and behave fiscally responsible.
Re: Opendoor is cutting 35% of its employees
#38Earlier quoted context omitted.
Turns out the inventory you hold to flip can be enough to get you killed during a crash. Ask Lehman Brothers.
Agreed, I like their website a lot but don’t like them trying to sell houses
Seems like a pretty serious conflict of interest, being both broker and seller. I’d think twice about counting on them for price discovery now.
Re: Opendoor is cutting 35% of its employees
#39Damn, this list keeps growing and growing ... https://layoffs.fyi/tracker/
Yes, but stocks are ripping higher on much worse jobless claims, housing starts, and Philly Fed numbers than expected, 113 unexplained cases of reinfection in South Korea, and the PPP fund being completely tapped out with three weeks to go in Congress' recess.
The market is fully convinced that everything is fixed.
Re: Opendoor is cutting 35% of its employees
#40Earlier quoted context omitted.
Yes it is. They backed a couple hilariously bad bets in a big, public way, and people like feeling smarter than rich strangers. I would be curious, though, if there are other funds with similar scope and track records to Vision 1 that have just managed to skate under public scrutiny thus far.
> They backed a couple hilariously bad bets in a big, public way, and people like feeling smarter than rich strangers. The two things are related. The public visions for these companies went beyond the standard startup platitudes about 'making the world a better place'. Regular people can see through that, because they don't live in an SV bubble where playing along with this sort of hubris is encouraged. I don't thin…
> I don't think anyone thinks they're smarter than Softbank or Adam Neumann.
With all the armchair investing going on, you would think otherwise.