Airbnb Stock Price: All About The IPO
U.S. vacation rental company Airbnb Inc. plans to file its initial public offering (IPO) next week. This sets the course for a stock market revival as the current pandemic intensifies. Soon we will have an Airbnb stock price and stock symbol.
Airbnb’s IPO will give a detailed look into the company’s financial situation as the data about its’ business emerges. Covid had raised immense challenges for Airbnb, which led the company to shift its focus from city apartments to holiday home rentals. The demand for home-sharing surged as vacationers avoided hotel rooms to practice social distancing.
Airbnb plans to kick off a roadshow with investors in December to market the company and find out a viable IPO price. The actual launch of the IPO will depend on market conditions.
What Is Airbnb?
Airbnb was founded in August 2008 by Brian Chesky and Joe Gebbia. The company is currently headquartered in San Francisco, California.
Airbnb is a vacation rental company. Airbnb provides a marketplace that connects travelers with hosts offering spaces around the world. Homeowners can list their rooms on Airbnb, giving information about the rental agreement. And the travelers can choose one of the many accommodations listed on the website, based on their preference.
By facilitating bookings along with financial transactions, Airbnb makes listing a space effortless. Airbnb has over 7,000,000 listings in about 100,000 cities in 220 countries. Airbnb offers the widest variety of unique spaces for everyone, at any price point around the globe.
Airbnb Stock Symbol
The Airbnb stock symbol is ABNB and it will be listed on Nasdaq. November 17, 2020, Airbnb filed IPO prospectus on Form S-1 to get listed under the stock symbol ARNB on Nasdaq.
When Is Airbnb Going Public?
Airbnb is not a publicly-traded company. For the last twelve years, they have grown their business and are now a segment leader. To grow their company further and provide an exit to their investors, they plan to go public in early 2021.
Airbnb Inc. plans to list its Airbnb shares on the Nasdaq and not NYSE, setting the stage for one of the most high-profile stock market debuts of the decade. The company aimed to raise $3 billion in its IPO, giving it a valuation of more than $30 billion.
Earlier this year, Airbnb had to secure emergency funding from investors as travel outlook was in the doldrums. A push to go public and the growth in its potential valuation underscores Airbnb’s dramatic recovery from earlier this year.
How to Analyze and Trade Airbnb Shares
Stock research websites are the best place to start researching specific stocks. The best stock research websites allow you to set up alerts for specific news about a company. You could set up an alert with the combination of the company name and the term earnings, for example, “Airbnb Earnings.”
As an exchange-listed company, Airbnb might be one of the best stocks to buy now. The best stock analysis software can be used for a more extended due diligence process before making the final decision.
Then, you can use the best stock trading apps to buy stocks of Airbnb. You can buy and sell your preferred number of shares by using the official stock ticker symbol within your trading platform.
Once invested, you can use your brokerage account or one of the best stock tracking apps to manage your positions within the portfolio.
Is Airbnb IPO a Good Investment Opportunity?
When investing in an IPO, you should look for your investment horizon. Do you want to hold stocks for the long-term or the short-term?
On average, IPO issuance price is kept low to ensure that that the IPO generates enough interest from investors. On average, stock prices rise post IPO, and hence investors who get allotted shares during the IPO process make a decent return in the short-term. However, getting a share allotted during the IPO process is a matter of chance. If oversubscribed, not everyone gets stocks assigned to them. The only option is to buy stocks when a firm gets listed on an exchange in that scenario.
As we mentioned, Airbnb is expected to be listed at a valuation of $30 billion. Is this an undervaluation for Airbnb, and can one expect its price to rise in the long-term?
Airbnb’s biggest competitors are other travel companies. Shares of U.S. online travel company Booking Holdings Inc. (BKNG.O) is used as a conservative public market proxy for Airbnb. Currently, the total valuation of Airbnb is $72.4 billion, with a share price of $1,783.75. This implies that institutional investors should believe that Airbnb is an excellent stock to have, at least for the mid-term.
We have only looked at one metric, i.e., market cap. As an investor, you need to look at other metrics such as profitability, price to earnings ratio, among others.
A thorough due-diligence of the financial status and business model of Airbnb is currently not possible. This is because Airbnb is a private company, and they don’t put their financial numbers in the public domain.
You can only analyze Airbnb’s financial condition once its prospectus is released as part of filing rules.
Over the past few months, the travel business was facing the heat, which must have impacted their business in the short-run. If Airbnb doesn’t have a lot of debt on its’ books, problems should be considered a temporary disruption in their business. Its long-term impact should be limited.
However, if the company had to raise a lot of debt due to the recent challenges in the travel industry, then one should look at their ability to service interest. Plus, one should analyze if the high levels of debt would impact their future growth expectations.
Unfortunately, we cannot analyze these points currently. Once Airbnb releases its prospectus as part of IPO, we should be better equipped to answer these questions.
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