Offerpad Solutions (NYSE:OPAD), the real estate iBuying company that recently went public via a merger with a special purpose acquisition company, is on the move today. As of 2:30 p.m. EDT, the real estate technology stock was higher by a staggering 28% in just its second day of trading under its new ticker symbol, OPAD. In fact, the move higher was such a sharp one that Offerpad triggered a circuit breaker and was temporarily halted earlier in the trading session.
There isn’t any company-specific news propelling Offerpad higher. But there are a few things investors should know.
For one thing, Offerpad was trading below the net asset value of its SPAC for much of recent history. In fact, while the SPAC held $10 per share in trust as the deal was waiting to be finalized, Offerpad closed at just $8.63 per share Friday afternoon. So, even after today’s move, Offerpad trades for just 10% above the SPAC’s net asset value and is still well below the $13 pre-merger high.
Second, investors might be breathing a sigh of relief that the merger happened at all. Because shares were trading below NAV, investors had a right to redeem their SPAC shares prior to the finalization of the deal. It certainly appears many investors chose to do so — the initial deal called for Offerpad to get as much as $650 million in cash, but the company ended up getting just $284 million. So, we could be seeing a bit of a relief rally here.
Unlike most other iBuyers, which prioritize growth at all costs, Offerpad focuses on being the most efficient platform in the market, as evidenced by the company’s $9.2 million second-quarter profit (most iBuyers lose significant money per transaction). With a $3 billion valuation, Offerpad is valued much more cheaply than its competitors, so it could be an interesting stock to watch if you believe in the long-term potential of iBuying.
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