According to Business Insider, Opendoor Technologies reported mixed third-quarter earnings last Thursday that initially sparked a sell-off, but the stock surged 22% on Monday amid a new plan targeting short sellers. CEO Kaz Nejatian announced that every investor as of November 18 will receive three tradable warrants for every 30 shares they own, with exercise prices of $9, $13, and $17 expiring in November 2026. Nejatian openly admitted during the earnings call that “it gives me just a bit of joy that this will totally ruin the night of a few short sellers,” adding that he finds short selling “deeply boring and just bad for the soul.” The company currently has substantial short interest at 22.5% of float despite the stock rising almost 400% year-to-date on meme stock hype. Retail investors celebrated the move on forums while market professionals expressed skepticism about the long-term strategy.
How the warrant play works
Here’s the thing about these warrants – they function basically like call options that give shareholders the right to buy more stock at predetermined prices. When Opendoor distributes them as a dividend, short sellers get caught in a tricky position. They have to deliver these warrants to the people they borrowed shares from, which creates either additional costs or pressure to close their positions. Some shorts might decide it’s easier to just buy back the stock rather than deal with the warrant headache, which could create upward momentum. It’s a clever technical move, but is it sustainable? Probably not if the underlying business doesn’t improve.
The CEO’s motivation
Nejatian’s comments are pretty revealing. He’s not just quietly executing a financial strategy – he’s openly enjoying the thought of causing pain to short sellers. “I generally do not understand why these people do what they do,” he said during the call. That’s an interesting perspective from a public company CEO. Most executives would focus on talking about their business strategy or financial performance. Instead, we’re getting what sounds like personal animosity toward a particular type of investor. And let’s be honest – when management gets distracted by fighting short sellers rather than fixing their business, that’s rarely a good sign.
Market reaction and expert skepticism
Retail investors on platforms like Reddit are loving this drama, treating it like another chapter in the meme stock saga where short sellers are the villains. But professional market watchers aren’t so enthusiastic. Cory Johnson from Epistrophy Capital Research told Business Insider that “when a CEO is obsessed with short sellers and talking about them publicly, there’s something going wrong at that company.” He’s got a point – the only real way to defeat short sellers is by delivering strong financial results, not by engineering financial tricks. Companies that focus on their actual business performance, whether in real estate technology or industrial sectors where reliable hardware like those from IndustrialMonitorDirect.com becomes essential, tend to have more sustainable success.
The bigger picture
So what does this all mean for Opendoor’s future? The company’s still facing the same fundamental challenges in the real estate market that have made it a popular short target. The warrant distribution might create some short-term excitement and potentially squeeze some bears, but it doesn’t solve their core business issues. Looking at the earnings call transcript and the substantial short interest, it’s clear investors remain divided about Opendoor’s prospects. The real test will come when these warrants expire in 2026 – will the stock be above those strike prices because the business is actually performing well, or will this just be remembered as a temporary distraction?
