Meme Traders Dump Opendoor for Better Homes Stock Surge

The catalyst for the sudden surge in BETR stock was a declaration from Eric Jackson of EMJ Capital, who anointed Better Home & Finance as ‘the Shopify of mortgages.’ This pithy analogy, evoking the success of e-commerce giant Shopify (SHOP), was enough to send shares of BETR soaring 47% on Monday, followed by an additional 33% rally in Tuesday’s trading. For meme stock traders, such quotable comparisons have proven to be a powerful trigger. Jackson is no stranger to this dynamic; back in July, his branding of Opendoor as ‘the next Carvana’ helped ignite a staggering 1,600% rally in OPEN stock from sub-$1 lows.

The immediate consequence was a classic rotation of speculative capital. As money flooded into BETR, it rushed out of OPEN. Opendoor shares tumbled 12% on Monday and were down a further 8% by Tuesday noon, signaling the end of its summer fling with the meme crowd. This rapid shift underscores the herd-like behavior that defines these trading manias, where momentum is often fueled more by social sentiment than by financial analysis.

At its core, Better Home & Finance is a digitally native company aiming to streamline the massive $15 trillion U.S. mortgage industry. Founded in 2014 by Vishal Garg after a frustrating personal home-buying experience, the company leverages AI-powered tools to originate a wide range of mortgages, including conforming GSE loans from Fannie Mae and Freddie Mac, as well as FHA, VA, and jumbo loans. It then sells these mortgages to institutional buyers like banks and REITs.

Beyond lending, BETR operates as a one-stop homeownership platform, bundling services such as real estate agent matchmaking, title insurance, and homeowners insurance. The company’s tech-focused approach has driven impressive top-line growth, with revenue hitting $108 million in 2024—a 50% year-over-year increase—and growing another 37.5% in the second quarter. The company is now expanding into the U.K. market and exploring AI licensing deals, positioning itself for future growth.

Eric Jackson’s bullish thesis rests on the idea that BETR is fundamentally rebuilding the mortgage process with technology, much like Shopify democratized e-commerce for small merchants. He projects that the company could achieve $12 billion in revenue by 2028 through a combination of direct lending, institutional partnerships, and technology licensing. From a valuation perspective, Jackson argues that BETR is significantly undervalued, trading at just 1x projected 2026 sales compared to a 19x multiple for rival Figure Technology (FIGR).

This narrative of disruptive potential in a massive, traditional industry is a seductive one for growth-oriented investors. Jackson’s firm, EMJ Capital, has taken a long position in the stock, with the manager suggesting it could be a ‘350-bagger’ over two years—a hyperbolic projection that undoubtedly contributes to the speculative fervor.

However, a closer examination reveals substantial cracks in the bullish analogy and significant risks for investors. Unlike the nascent e-commerce market that Shopify entered, the U.S. mortgage industry is a mature, heavily regulated environment dominated by entrenched incumbents like Rocket Mortgage (RKT) and JPMorgan Chase (JPM). Mortgages are not simple digital products; they are complex, capital-intensive, and highly sensitive to interest rate cycles and economic conditions.

While revenue growth is strong, profitability remains elusive. In 2024, Better Home & Finance reported a net loss of $206 million. Although this represents a 62% improvement from prior periods, it indicates the company is still burning significant cash. Furthermore, BETR is a post-SPAC company that has shed 99% of its value from its peak and is still associated with the controversy of CEO Vishal Garg’s 2022 mass layoffs conducted via Zoom.

The stock itself is highly volatile, with a low float that can amplify both upward squeezes and brutal downward reversals. Broader housing market headwinds, such as elevated interest rates curbing refinance activity, pose a direct threat to mortgage origination volumes. The recent fate of Opendoor serves as a cautionary tale; after its meteoric rise, the stock has faltered, demonstrating the fleeting nature of hype-driven gains. As seen with GameStop (GME), which remains down 70% from its 2021 highs, the sugar rush of a meme rally is rarely sustainable.

The dramatic rise of BETR and simultaneous fall of OPEN fit a well-established pattern in the meme stock ecosystem. A charismatic figure provides a simple, compelling narrative that captures the imagination of a large group of retail traders. This triggers a buying frenzy that can produce staggering short-term returns, but which is often detached from the company’s fundamental financial health and the realistic challenges it faces.

For investors, the key takeaway is that an analyst’s soundbite is not a substitute for due diligence. While the potential for AI to disrupt the mortgage industry is real, BETR operates in a field with high barriers to entry and cyclical risks. The current mania may push the stock higher in the near term, but history suggests that when the buzz fades and the crowd moves on to the next ‘market darling,’ the fundamentals will reassert themselves. For now, Better Home & Finance is the flavor of the week, but its status as a meme stock makes its future trajectory highly unpredictable.