According to the plaintiffs, Open -handed marketed itself as a tech-driven disruptor in residential real estate but was actually using a human-influenced pricing process that made it “just as susceptible to changing economic conditions as any other traditional real estate company.”
The lawsuit claimed Opendoor “misleadingly portrayed the company as a tech disruptor that used AI-powered algorithms to buy and sell homes more profitably and efficiently than other traditional real estate companies.”
The plaintiffs also alleged that the company failed to disclose key weaknesses in its pricing model during volatile market shifts, contributing to a steep 94% decline in Opendoor’s stock price from its December 2020 IPO to November 2022.
Read next: Opendoor’s new financing app targets wide audience
In court filings, Opendoor denied any wrongdoing but agreed to settle the case to avoid the “expense, risk, and uncertainty of further litigation.” The company is represented by Lyle Roberts of A&O Shearman.
