Opendoor's stock may be drawing in more bearish bets against it, even as it keeps rising. Here's why.

By James Rogers

Shares of heavily shorted Opendoor Technologies are continuing their rally, putting the stock on pace to extend its winning streak to seven days

Shares of Opendoor Technologies Inc. are continuing their rally Monday amid what data-analytics company S3 Partners describes as an ongoing "volatile battleground" for the heavily shorted name.

The shares have seen a frenzy of activity in recent weeks. Noted bull Eric Jackson, the founder of EMJ Capital, has been a high-profile champion of the e-commerce platform for residential-property transactions, rallying retail support around what has been dubbed the "OPEN army." While the stock's performance sparked comparisons with prior meme-stock explosions, Jackson says that Opendoor is no meme stock, describing it instead as a "cult stock."

Opendoor shares (OPEN) were rising 5.3% in recent morning trading toward a three-year high, and have run up 74.1% amid a seven-day winning streak. The stock has registered an eye-watering gain of 929.7% over the past three months.

S3 Partners explained in a recent note to clients that short interest - the number of shares bet that the price will fall - remains heavy at around 155 million shares, or around 24% of Opendoor's float, or shares available for trading by the public.

"Opendoor began 2025 with its long-to-short ratio near 2.0x, showing active longs still outweighing shorts," wrote Sam Pierson, director of research at S3 Partners. "But sentiment was weak, the stock traded under $1, and positioning slid into 'battleground' territory as shorts built."

Pierson noted that by June, nearly a quarter of Opendoor's float was short. Retail activists then "took over the narrative," he said, fueling a nearly 900% rally from late June through Sept. 3.

Set against this backdrop, S3 Partners' "squeeze score" for Opendoor remains pegged at 100. A short squeeze is when a stock rally causes investors who hold shorts to buy as they scramble to cover their short positions.

For S3 Partners, a squeeze score of 70 to 100 identifies squeezable stocks, with scores over 90 having a significantly higher risk of a squeeze, as well as the potential for the resulting buy-to-covers to push stock prices higher.

"While borrow supply remains tight, easing fees suggest some structural pressure on shorts is subsiding," Pierson wrote in Friday's note. "Importantly, part of the elevated short interest reflects convertible-arbitrage hedging rather than purely directional bets, which complicates the meme-stock narrative."

(For a stock to be shorted, it must first be borrowed from someone who owns it. Read more about the mechanics of short selling.)

However, the stock's current rally may be "drawing in" new bearish directional shorts, according to Pierson. Together with structural hedge shorts and a more than 34% increase in active long interest this year, this ensures that Opendoor remains "a volatile battleground," he added.

One meme-stock trader who goes by Obi and uses the name @ObiMem on X and Major-Access2321 on Reddit noted the recent spike in retail investor sentiment around Opendoor, as well as economic sentiment. While interest rates have been coming down slightly, this has not reached a level that would have a huge effect on the housing market as a whole, according to Obi.

"This type of momentum isn't sustainable for any stock in the housing market, so expect a retracement and/or correction here pretty soon in OPEN," the trader said in a YouTube video Sunday.

-James Rogers

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09-08-25 1123ET