Shares of Opendoor Technologies (OPEN -23.26%), the leading online home flipper, were falling today after the company said it was refinancing convertible debt and taking on new debt, which seems to confirm that the company is struggling to turn profitable, as we saw in its first-quarter earnings report.

As of 1:57 p.m. ET, the stock was down 18.9%.

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Opendoor adds new debt

In a filing, the company said it was refinancing $245.8 million in 2026 notes with notes due in 2030, with an interest rate of 7%. It's also raising an additional $79.2 million in new debt at 7% as well.

The conversion price will be $1.57 per share, an 80% premium to its closing price yesterday, meaning that the debt can be converted at a price equivalent to $1.57, though the bondholders would only convert if Opendoor's price went above that. Such a conversion would lead to substantial dilution for Opendoor, as its current market cap is just $515.8 million.

What it means for Opendoor

The debt refinancing isn't necessarily a bad thing for Opendoor, as it gives the company more financial flexibility and capital, and pushes out the 2026 debt repayment.

However, it does show that the company is operating from a weak financial position, and a profitable future increasingly seems distant, given its inability to generate a profit so far and the weakness in the housing market.

The company finished its first quarter with $559 million in cash and has lost $696 million in operating cash flow in the last four quarters, showing its cash burn rate is substantial. Despite its low price, the stock could easily head lower.