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pendoor, a prominent iBuyer, has agreed to a $39 million settlement in a lawsuit alleging the company misled investors about its proprietary pricing technology. The system, touted as AI-powered, was actually reliant on human processes that left it vulnerable to market fluctuations. A federal judge must approve the preliminary deal.

    The lawsuit, filed in 2022, claimed Opendoor misrepresented its pricing algorithm as a powerful tool for outperforming traditional real estate firms. However, according to plaintiffs, the company's approach relied heavily on manual processes, making it susceptible to market volatility. As housing conditions shifted during the market cooldown, the limitations of Opendoor's pricing strategy became apparent.

    Opendoor has denied any wrongdoing and chose to settle to avoid prolonged litigation costs. The company recently laid off 40 employees and is planning a reverse stock split in an effort to stay listed on the NASDAQ. Plaintiffs described the settlement as a "prompt and substantial tangible recovery."