iBuyer company Offerpad warned that stock may be delisted
The company received notice from the NYSE that it was not in compliance because its stock price stayed below $1 for 30 trading days.
- Offerpad has six months to increase its stock price; the company says it will take steps to come into compliance.
- Many iBuyer companies have struggled during this residential real estate market slowdown.
As iBuyer programs continue to struggle in this real estate market slowdown, one is in danger of having its shares delisted by the New York Stock Exchange.
Offerpad received notice on Nov. 16 from the NYSE that it is not in compliance because its stock price has remained below $1 for 30 consecutive trading days.
The notice does not mean the Offerpad is being immediately delisted; the company has six months to come into compliance. In a Nov. 18 news release, Offerpad said it will take steps to get its stock price above $1 and is currently weighing options, including a potential reverse stock split.
Like many iBuyer companies, Offerpad had a difficult third quarter, posting a net loss of $80 million according to its Nov. 2 earnings report.
"Despite the current market volatility, I firmly believe technology-enabled solutions that simplify the home ownership experience will define the future of real estate," said Brian Bair, Chairman and CEO of Offerpad, upon release of the earnings report.
The iBuyer industry, which involves companies buying homes, doing light renovations and quickly reselling them, has been battered by shifting market conditions, causing some major players to exit the market. Zillow began shuttering its Zillow Offers program in November 2021 and sold its last home earlier this fall. More recently, Redfin announced this month that it would end its RedfinNow iBuying program.
Opendoor, one of the remaining dominant companies in the iBuying market, announced in early November that it was laying off 550 employees, reducing its workforce by 18%. The company reported $211 million in third-quarter adjusted losses in its most recent earnings report.
In its Q3 earnings release, Offerpad said it was focused on selling the homes that it had acquired before the market slowed.
"We continue to navigate through this period of market dislocation by appropriately managing down our inventory levels and strategically acquiring homes that reflect current conditions," said Mike Burnett, CFO of Offerpad. "We are already seeing homes acquired later in the year performing better than those acquired prior to the market dislocation."
At the end of the Nov. 18 trading session, Offerpad's stock price was 73 cents a share.