The meme stock rally continues, and one big shareholder cashed out.
Shares of Opendoor Technologies (OPEN 9.94%) have resumed their rally after a brief pause last month. The stock jumped as much as 12.3% this morning and remained higher by 4.8% as of 12:05 p.m. ET. Opendoor has become the latest meme stock as retail investors continue to push it higher.
That jump comes despite a recent Securities and Exchange Commission (SEC) filing showing that one large shareholder is cashing in on the rally.
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A meme stock bonanza
Opendoor’s business has been struggling. The online real estate company has been a victim of a sluggish housing market. Its stock bottomed out in June at $0.51 per share. Then retail investors stepped in and sparked a huge rally. Short-covering accelerated it in July, and shares have skyrocketed over 800% since then.
Amid the meme stock euphoria, there was mounting pressure from investors for the underlying business to execute a turnaround. Former CEO Carrie Wheeler announced her decision to resign in mid-August. Wheeler posted about her decision on social media, stating: “The last weeks of intense outside interest in Opendoor have come at a time when the company needs to stay focused and charging ahead. I believe the best thing I can do for Opendoor now is to accelerate my succession plans that I shared with the Board mid-year and make room for new leadership to take the reins.”
A new SEC filing shows that Wheeler has now sold 7 million shares worth almost $35 million. That’s about half of her total stake, and it was worth only about $3.5 million as recently as late June.
Sometimes, large shareholder sales can help push the stock down. But there are enough retail buyers to keep the rally going today. Wheeler’s 7 million shares represent slightly less than 1% of Opendoor’s total shares outstanding.
With the housing market still slumping, and considering the extraordinary rise in the stock in recent weeks, investors might be smart to follow Wheeler to take profits.
Howard Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.