Buy Chamath's "10x Idea" OpenDoor? Hedge fund analyst on if you should buy OpenDoor stock ($IPOB)

From our Morning Cents newsletter yesterday morning (9/16/20):
"Opendoor, Redfin, and Zillow have ambitions of using AI and machine learning to make buying and selling homes more efficient and eventually become the middleman between all real estate sales and purchases, and I am rooting for them. I have always disliked the real estate market’s inefficiency, with exorbitant 6 percent real estate agent fees every time someone sells a home. If someone has $100k equity in a $400k house, they have to pay $20k+ in broker fees to sell it. But unfortunately, it’s a hugely capital intensive endeavor to be able to buy millions of homes every month, renovate them, and sell them, all for a slim profit margin of 5 percent. I am also aware that buying and selling a home is intensely personal and requires physical showings. My view is that the “transformation” will not be a quick or complete one; technology will enable automated selling and self-showings of buyers (possibly displacing many real estate agents), but it will take at least a couple of decades to take meaningful market share. About OpenDoor ($IPOB), at around $16 per share, the stock values OpenDoor at $8.5 billion, about 9.5x 2023 projected gross profit. Even though I think it will take a long time for this industry to take meaningful share, that doesn’t mean they can’t keep growing quite a bit in the meantime. Given Zillow ($Z) trades at 8.8x and Redfin ($RDFN) trades at 9.8x 2023 projected gross profit, it’s pretty “fairly valued” in comparison to its competitors. I do believe in the trend in the very long-term, though, and if you want exposure to home “iBuying,” I would own all three ($IPOB, $Z, $RDFN) to diversify yourself."

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