Opendoor Leaders’ Algorithm Claims Collapse — and How Investors Could Still Win

Court: D. Arizona

Case: 2:22-cv-01717

Opendoor Technologies OPEN has agreed to a $39 million settlement with investors who accused executives, including co-founder Eric Wu and former CFO (now CEO) Carrie Wheeler, of misleading them about the company’s algorithm, its consumer practices, and its financial stability.

The agreement comes after years of litigation over Opendoor's promise of a tech-driven revolution in home sales, which instead relied on manual pricing and deceptive practices that misled both consumers and shareholders.

How Leadership’s Assurances Fell Apart

Executives claimed that Opendoor’s algorithm could withstand even the toughest markets. Wu claimed in March 2022 that “if you run the business model through the worst recession in U.S. history, we would still have positive contribution margin”.

However, in reality, Opendoor’s pricing wasn’t automated at all. Former employees revealed that humans, not algorithms, set home values — and when the housing market turned, the model collapsed. Internally, Opendoor also charged sellers for inflated or unnecessary repairs, pocketing the difference as profit.

By August 2022, the FTC announced a $62 million settlement over deceptive marketing, with regulators concluding that “the vast majority of consumers who sold to Opendoor lost thousands compared to selling on the open market.”

Despite this, Opendoor’s press releases insisted the company’s problems were contained.

Investors Call Out the Storyline

As the truth emerged in 2022 — unsold inventory piled up, margins shrank, and FTC findings went public — Opendoor’s stock collapsed. Investors filed a lawsuit claiming that executives had deliberately hidden these risks to inflate the stock while insiders cashed out tens of millions.

A $39M Deal for Shareholders

Now, Opendoor has agreed to a $39 million settlement to resolve these claims. While the company and executives deny wrongdoing, the deal gives shareholders a chance to recover part of their losses.

If you bought Opendoor, claims are already being accepted. You can check eligibility and file a claim here.