Welcome back everyone. Today on the Joseph Carlson Show
we are going to talk about one of the best performing stocks in
the market. Now 2025 has been a remarkable
year for investors. If you're looking at your
portfolio and you made semi good decisions, you've had great
returns. Google's at an all time high,
Microsoft is going higher and higher.
Companies like NVIDIA and Amazon, even companies like
Palantir and Tesla have been crushing it this year.
It's an exciting year for investors as we look across our
gains. But there is one company, one
company that's outperformed all the rest.
And it's one that you probably wouldn't suspect because it's
one that's been left for dead before.
It's name is Opendoor. It's the real estate tech
company where they buy and sell homes.
This little real estate tech company is up 500% year to date.
It's gone parabolic. Investors are clamoring to
shares, and there's a whole social media circle diving into
this company. And the person behind all of
this is named Eric Jackson. This guy, the one that's
standing in front of Drakes home asking him if he'll buy the
stock. Eric Jackson is an expert at
meme stocks, at ones that have gone parabolic.
In fact, this isn't the first time that he's done this.
A few years ago, he gained notoriety by buying Carvana in
2022 at the absolute bottom. He was bullish on the stock when
everybody had given up, when investors were shorting the
stock, when they were leaving it for dead.
He was one of the only ones that said that this company could
turn around, that it could have substantial gains.
Carvana is up over 8000% from the lows.
No, not 800 percent, 8000%. It has gone parabolic for years.
It's soared above any other stock.
And this is Eric Jackson's work, the guy that was behind
Carvana's rise. Now he's turned his attention to
Open Door. Well, I believe Open Door
deserves a closer look. We're going to be looking at the
full story, the history, the people behind it and running it,
and the thesis for the future. Now, of course, we have a lot of
other news to get to in this episode.
Google is hitting a new all time high, $250 per share above a $3
trillion market cap. And the Google Gemini app, the
direct competitor to Chachi PT and Grok, is now in the top spot
in the app App Store. We'll be discussing that as well
as we have news at ASML, a company that I've been talking
about continually as being undervalued is up 5% today.
It seems like it's having a breakaway.
The stock is lifting further and further.
We'll be discussing this one. President Trump is making some
moves. He's saying that companies
should end their quarterly earnings report mandate.
Instead, they should be required to report only once every six
months. This follows after China that
has more of a long term approach with their companies.
Is this a good direction for the market to go should companies no
longer report on a quarterly basis?
We'll be discussing. So we have a lot to get to in
this episode. Now before we jump in, just a
quick reminder. Qualtrim is a tool that I own
and I've built for you, the investor.
In fact, I've built it for myself.
But it's been such a popular tool that we now have over
10,000 users and we get emails all the time like this one.
This is real e-mail that we just got three days ago.
It says, hello team. I've been in and out of Qualtrim
and I've tried several tools out there.
Finally I'm back at Qualtrim. That must mean something.
These are the type of emails we get all the time.
Users that try out Qualtrim and then they try out a lot of
different services. They come back to Qualtrim
because it's better, it looks better, it works better, it
functions better, it's faster, it's easier to use.
It's all the things we hear over and over again.
And if you're currently using other tools and you haven't
tried out Qualtrim recently with some of the updates we've done,
I would suggest trying it out. You're going to like it better
and you're probably overpaying for those other tools.
You can try out Qualtrim today with a free trial, risk free by
visiting the link in the pin comment below.
Now, like we mentioned at the start, Open Door has been the
best performing stock in the market going up 530% year to
date. So it's 5X and it still seems
like it has a lot of momentum. It's gaining more notoriety and
popularity online. And this all started with a guy
named Eric Jackson. If we look back at what Eric
Jackson became notable for, it all started in 2021 with a stock
named Carvana. Now, Carvan is a stock that
you've probably heard before, even on this channel.
It was a company that I covered many times.
It's a company that flips cars like a used car dealership, but
they had a unique strategy. They had these big towers.
They were like vending machines for vehicles.
I remember myself mocking them at one point.
Remember those things? You've probably seen them on the
side of the freeway. They're just stacks of cars on
top of each other and a glass vending machine.
That is Carvana, the company that will easily buy your car
and the company that you can easily buy a car from.
They deliver it right to your front porch.
During the 2021 hype, many companies like Carvana,
especially car companies, went up like crazy.
If we look at this stock over the past five years, we can see
that in 2021, it got to a price of $370.
Remember the mania that was happening, the meme stock hype?
Interest rates were low. Investors were extremely
bullish. They're buying up everything.
And Carvana at the time was actually doing well.
It was growing revenue. They were turning over a lot of
cars, but then the 2021 sell off happened going into 2022.
If we zoom into just the past five years, we can see this
dramatic sell off. In a matter of months.
The stock price plummeted from 370 to 3:30 to $300 per share.
In early 20/22, it was slashed in half down to 170 dollars, and
in fact, it went down continually even in 2022, now
down to $24.00 per share. In late 2022, early 2023, the
stock had fallen all the way down to a price of $4.00 per
share. That is a share price drop of
98% in a single year. Now, like most of us, we look at
this and we see a stock price that's dropped precipitously.
It's utter destruction. The company looks like it must
be in bad shape. When we looked at the
fundamentals at the time, that's how it appeared.
The revenue was also going down as car sales were coming to a
halt. Carvana had a huge inventory of
cars that they purchased at high prices.
Those car prices fell and they could not sell them at a profit.
So Carvana was stuck with inventory that was overvalued
and they had to get rid of it. They had to turn it over.
This caused massive losses every single quarter.
In fact, on a trailing basis at the most, Carvana lost $3.35
billion in a 12 month period. They were selling cars for half
the price they bought them. And at the same time it looked
like the company was going bankrupt.
They'd taken on enormous amounts of long term debt.
This is the type of debt that bankrupts companies.
They can't get it paid off. It's too difficult.
The interest payments stack up and cash continues to flow out.
The next step they do after they can't issue any more debt is
they try to make money by selling shares.
They start to dilute the shareholder, and that's exactly
what Carvana did. The combination of diluting the
shareholder and issuing debt caused the stock to plummet even
further. Now at a certain point, Carvana
for a very small amount of time hit a share price of $3.50 and
that is where Eric Jackson bought the stock.
His first purchase of Carvana was $3.50, almost the exact
bottom. Not only did he buy it, but he
was also one of the very few, in fact one of the only ones that
was vocally bullish on the company.
He said that a turn around would happen.
He said that it could be a potential 100 bagger and it was
a potential 100 Packer. In fact, as we know now, Carvana
went from $3.50 now back up to 370 dollars, up 100 times its
original price. Now the stock price moving up is
one thing, but do the fundamentals justify it?
Well that is the interesting part of this.
It seemed like Carvana was much more than just a meme stock.
It actually seemed like Eric Jackson was correct where many
analysts were wrong. We were all believing this
company would go bankrupt based on the financials, the long term
debt, the share issuance and the bad business model.
But this company was able to make it.
They're able to turn things around.
Not only did revenue start to grow again instead of shrinking,
but they started to get rid of their bad inventory.
Quarter after quarter. The company lost less money than
the prior quarter until it finally became cash flow
positive. That's a decent amount for a
company that was just recently looked at as going bankrupt.
The free cash flow has caused their cash balance to go up in
proportion to their long term debt, strengthening their
balance sheet. They're no longer in distress.
They're now a cash flow positive and growing business.
Now you may think that after after finding a successful 100
bagger, you might want to take the week off, maybe take a
break, a vacation and things on a high for a while.
That's not what Eric Jackson did.
In fact, immediately after finding the Carvanha 100 bagger
and being so public about it, he set off to find the next 100
bagger. He didn't want to settle for
another 50 X company, he wanted another 100 X.
And even during that time period in 2022, he was eyeing another
company that he believes was a bit similar.
This one is in a different industry, but it has a lot of
the same characteristics. The company was open door.
Now, if you're not familiar with the business model of open door
and a basic summary, the company buys homes, it does necessary
repairs and it flips them and it does that at scale.
This is a company that was another high flying stock in
2021. There's lots of people talking
about the huge business. It could become disrupting the
multi trillion dollar real estate business.
Think about how much money is made by buying and selling
homes, and Open Door seemed like it was going to be a disruptive
force in that category. Well, while the stock flew in
20/21, it had a very similar fate as Carvana.
Once the hype faded, investors become bearish.
The number showed negative quarter after negative quarter,
and especially in the housing market.
As interest rates went up, the housing market went to a
standstill. Homes became unaffordable and
people just stopped buying them. In that case, Open Doors
business model came to a grinding halt, very similarly to
Carvana. Open Door went from a evaluation
of $20 billion to below 500 million.
And as that stock was completely obliterated, eviscerated, left
out to die, investors giving up on it and calling it quits,
guess who was silently buying shares of the company?
An evaluation of below $500 million was Eric Jackson again
finding his next 100 bagger, finding a stock that investors
had previously given up on that has a chance for a big comeback.
Now, in Jackson's case, he's actually expressed a sound
thesis for the company, at least a sound thesis to buy a beat up
stock. This wasn't just the meme
potential of it. He always knew that there was a
social media following and cult like following of these type of
companies. So it always has that meme like
potential, but there's also a real business underneath.
At the same time the Open Door was falling, many of the
competitors to Open Door were falling more.
Zillow and Redfin had completely abandoned their home flipping
business, leaving Open Door to be the only one to operate in
that business. Literally the only one.
They have no competitors actually doing the same thing.
Every company had given up, giving them the entire
opportunity. At the same time, Open Door was
aggressively cutting costs, laying off, reducing expenses by
over 20%. The company was doing a lot of
cost cutting and internal changes to make the company more
profitable. Additionally, one of the biggest
problems at the time were the high interest rates, and Jackson
believed that those wouldn't last forever.
He believed the Federal Reserve would eventually lower them,
causing Open Door to be able to do more business in this
category. Jackson believed firmly that
Open Door represented another legitimate 100X opportunity, a
stock that was a penny stock that would not be one for long.
Now again, Jackson had been silently purchasing shares of
Open Door for some time at a price point of around 40 to
$0.80. So all of his purchases were
below $1.00 per share. And then in July 14th of this
year he made his announcement on social media X.
He announced that Open Door could be his next Carvana.
He gave a detailed analysis of his fundamental thesis on the
company and immediately the company went hyper viral all
across X and Reddit and social media.
The thesis for Open Door was now out the next 100 bagger.
Within one month, the company was up to $5 per share, already
an 800% gain for Jackson, and now it's at a stock price of
nearly $10 per share. This is around A12 to 15X gain
in only a couple months. Now in any case that a stock
goes up five to 10X in price in only a couple of months because
a specific personality mentions the stock that's usually looked
at as meme stock. A lot of people just following
it for the trend and they're overall ignoring the
fundamentals of the company. In this case, Jackson has said
that he takes offense that this isn't a meme stock.
He has a real thesis here. This is a real business that
could generate real big cash flows in the future, and that's
what's being priced in here. So while he defends the point
that this is a real company and not a meme stock, he also does
behaviors that look a little bit more meme stockish.
Here's a report of Jackson standing outside of Drake's
home, begging him to buy the stock.
And he's taking the posting to a new level today for a second day
in a row. Standing outside of the Canadian
rapper Drake's home, he's got a whiteboard asking him to buy a
single share of open door you can actually see on the screen
right now. So he's he's obviously this is
just a, a stunt, but it's a funny one.
He's literally standing outside of Drake's home with a sign
saying to buy, buy the stock. And here he's asked about this,
and we'll listen to his answer. Outside Drake's house, Eric, you
got a PhD in management from Columbia Business School.
At what point? What was then Eurus Hall did you
study? Trying to get a celebrity to buy
a stock. Ain't too proud to beg, Tim.
There's the answer. We tell us who inspired you to
do this again? Was my 16 year old son Julian?
But I have 4 kids and Julian he's my like free marketing
manager. He hasn't asked me for a dime.
His son is the one that gave him this idea.
And if you want to get social media, if you want to get
coverage, this was a good idea. So good on that 16 year old.
So while he says this isn't a meme stock, begging and front of
Drake does look memish and his defense is that his 16 year old
had that idea. Great idea, but it doesn't look
like it's a case based entirely off of the fundamentals.
Now again, when we look at Open Door, it's another company that
when you look at the fundamentals right now, they
don't look great. It doesn't paint the picture of
a growing company where the stock should be surging up 500%.
Open Door situation is not some massive profitable company that
should be going up 500% based on the fundamentals.
But it's also not a company in deep distress.
It's not going bankrupt tomorrow.
There is time for a thesis to play out and investors are
starting to bake in that thesis. They believe that there's real
potential with this company beyond meme stock territory.
Now one of the people that believes there's potential with
this stock is one of the Co founders, Keith Fabios.
He has been brought back to help out the company and here's him
addressing some of the questions and criticisms about this
company. How did you come?
Back to it, I think it's very simple.
Retail investors figured out the potential of the company
experts, Wall Street experts, etcetera, missed the potential.
Real residential real estate in the world is about a $289
trillion asset and nobody has transformed the buying and
selling of real estate in the world.
And Open Door has the most likely shot on goal of fixing
the transaction both from the buy side and the sell side.
Right there, he outlines the thesis, the potential above all
else. Open door represents potential.
The potential disrupt the highly lucrative and massive real
estate market. Just like investors were baking
in the price of that potential in 2021, they're starting to do
the same. But now they have more reason to
do so with Open Door than before.
Like we said earlier, Open Door does not face any competitors in
this field. The other companies like Zillow
and Redfin had given up. They're not in this anymore.
Open Door was also the only one to execute on this with any type
of positive fundamentals as well.
So the company has more experience doing this home
flipping, rebuying now. The real estate market is so
massive, it's almost incomprehensible.
The amount of homes that get bought and sold every single
day, the amount of volume and price in that, and the fact that
there's been no big tech company that's actually disrupted that.
It continues to operate in largely the same exact way.
Because real estate is so geographical, so specific, every
home is slightly different than another.
Everyone has a different corner of the lot that has a different
floor, a different window. It has a different backyard, a
different view. And that makes it very difficult
for companies like Open Door to be successful in a home flipping
business. That's where they try to do
things at scale. Scale's easy when you're
replicating the same thing over and over again.
A restaurant can make the same exact food in one state as it
does in another, in one city as it does in another.
But Open Door can't apply the exact same rules for one house
that they do another. The crime rates, the traffic,
the noise level, the location, everything is so specific.
So even though every company like Open Door that's tried this
business has failed, Open Door is still trying it.
And it looks like they may have some success, especially
interest rates go down. And this is what investors are
hoping for, that even if Open Door can figure out a little bit
of how to do this, even if they can disrupt some of the real
estate market, it would be a massive success.
It would be a $100 billion company where it trades that
only a $7 billion valuation today.
While it's model is not fully proven today, the potential
remains massive. And Keith Rabios outlines why
investors are willing to price in that potential ahead of the
fundamentals. So the potential of the company
is infinite and it took people like Eric Jackson, the activist
investor and normal American consumers to see that one way or
the other, we're going to transform the way people buy and
sell houses. And then that company, they
should be working a lot of money.
Many people compare us to Carvana.
I think the I used to compare us publicly, you know, on Twitter
and X to Carvana. I think the multiple of open
doors should be comparable to Carvana.
I think we have less competition and more upside.
So I think hopefully we do better than Carvana, but that
comparison easily gets you to where you are today.
Right there we have the comparison to Carvana on it and
we have the infinite potential. So there you have the case of
open door. Do you believe it's a meme
stock, one that we should scoff at and make fun of, or do you
see a real investment case here? That's up for you to decide.
As of now, I'm not investing in this one, but it's one that I'll
be watching. Now moving on, we get to some
news. One of the top stories that I
want to highlight today, of course, is another update on
Google. And I know I sound like a broken
record. Google has been such a an
interesting stock because it was so bearish just a few months
ago. Now it's becoming incredibly
bullish. The stock price is moving up.
It's up another nearly 4% today. Googles AI app is now #1 in the
top three apps surpassing chat TPT.
Now this is significant for a lot of reasons.
This represents right now what people are downloading the most
on the iPhone, the most lucrative App Store.
The people that are trend setters for the rest of the
world are downloading Gemini. Chachi BT historically has
dominated the number one spot for years.
It's just sat there without moving.
But here we have Gemini #1, Chachi BT #2 and it's been like
this for a few days now. When we talk about Gemini, it
was an app that started out way behind Chachi BT, not just in
users but in features. When I used Gemini, it didn't
have basic features like being able to pin a conversation.
The user interface was not great.
It just didn't feel as good to use.
But after a few updates, it's now really good.
The app has caught up to chat, TPT, and functionality and in
many ways have surpassed it. Google is able to use all their
training on YouTube data and images to make the most
incredible image generation possible, and that's gained a
lot of popularity. But what we see here is that
Google is slowly but surely crawling its way back into the
lead, not just in search, but now in specific AI.
People said for a long time that you don't.
You don't Google something now you chat, GT it.
But now a lot of people are going to be Geminiing things.
They're going to be searching on Google or Gemini.
The power of Google's distribution is one of the most
important parts of Google's long standing success.
Now we also have another company that's going up big today, which
is ASML, and there's really no big notable news here.
The company is up 5% today and I believe because it's on a
winning streak, investors are finally getting bullish on this
company. I've said before, the ASML is a
company that has been undervalued for some time and
now it looks like it's finally getting a breakout.
That's well deserved With ASML. It shows that there doesn't need
to be any big catalyst for a company to move.
In many cases, the best catalyst is just value.
Now we also have news of President Trump calling for the
end of quarterly earnings reports in favor of a six month
reporting period. The Wall Street Journal reports
that President Trump said companies should no longer be
required to report earnings on a quarterly basis, an idea that
explored he explored during his first term that has gained
traction recently. Publicly traded companies in the
US have reported results every three months for the past 50
years. Instead, Trump argued companies
should report their earnings every six months.
This will save money and allow managers to focus on properly
running their companies. Now, the argument for this is
that companies in the United States report so frequently that
they're so busy just focusing on the next quarter.
They're not long term focused. They're just focusing on what
this next number for this next quarter is going to be.
And there's certainly some truth to that.
A lot of companies, of course, in the United States are focused
on having that quarterly performance that year over year
gain on a quarterly basis and they push numbers for the
quarter. In many cases, you'll find
companies that do so at the detriment of their long term
performance and this could cause companies to underperform.
But there's also another side to this trade off that is very
significant. For one, transparency.
The move is likely to face opposition from investors who
rely on transparency of regular disclosures and crave more
quarterly earnings. Reports typically go hand in
hand with earnings calls that allow analyst to ask questions
of company's executives and that is absolutely true.
We actually don't hear from most management teams of most
companies that often. The ones that do interviews
publicly and come on to YouTube channels and do podcasts are
very, very few. Most company executives are just
quiet until the next quarter. That's the only real time that
investors can be updated on what's actually happening with
the companies. That's the only time that
investors get a peek at the financials.
And while it's somewhat true, at least the argument sounds
reasonable that companies will suddenly become long term focus
if they're only reporting every six months.
The evidence is not substantial in supporting that view.
There's other places in Europe that require reporting on a six
month basis, not on a quarterly basis.
And there's virtually no evidence that they make longer
term investments or that they invest more in CapEx.
In fact, even most recent places where that change has been made,
it hasn't changed the direction of company investments.
They typically invest just the same.
What does change is transparency and opacity into the companies.
They become more opaque. You can't see what's going on
with your investment as frequent.
You're waiting every six months instead of every three months to
get an idea or update of what's happened.
In many cases, there could be significant news that could
impact the company in between those time points, But you have
to wait and find out for month after month what happened.
And this also brings another big risk factor into the market.
If a company only reports every six months, that means that
investors have less data to price the company accurately,
leading to more volatility, more mismatched prices.
In fact, every six months means that investors have a much
longer time period to wait to identify if anything's wrong.
What if a company has a sudden struggle one month in sales?
What if there's something impacting the business
negatively? Investors would have to wait far
longer for them to legally disclose that than required.
So this could also lead to situations where investors are
waiting far longer to accurately price in the decline of a stock,
creating more volatility in the company.
So investors may debate whether or not the regulatory burden is
worth the transparency, but I believe it is.
I think investors are well served by additional
transparency. Being able to see the gradual
performance of a company over time is beneficial in pricing
and following a company leaving us to every six months gives us
less information to base our investments on.
It gives us less contact with management.
It gives less insight and confidence to individual
investors. And in terms of the overall
performance of our stocks in United States on a quarterly
basis compared to those largely popular in Europe that are
reporting on a semi annual basis, I think the results speak
for themselves. Now that's going to be it for
this episode. Hope you enjoyed.
See you in the next one.