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Airbnb Inc (NASDAQ: ABNB) Stock Overview – All You Need to Know About Airbnb Inc

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Airbnb Inc (NASDAQ: ABNB) Stock Overview – All You Need to Know About Airbnb Inc

Airbnb Inc (NASDAQ: ABNB) Stock Overview – All You Need to Know About Airbnb Inc

Vantage Updated Updated Mon, 2023 July 24 01:23

Have you ever used Airbnb to book your accommodation while traveling? If so, you’re probably familiar with the innovative platform that has disrupted the traditional hotel industry.

Did you know anyone can invest in Airbnb through the stock market? That’s right, Airbnb Inc (NASDAQ: ABNB) went public in December 2020, and since then, its stock price has seen its fair share of highs and lows.

In this stock guide, we’ll explore the history of Airbnb, its stock splits, and the price changes of ABNB; because who knows, you might just be the next shareholder of this leading marketplace for accommodation.

Read on to see what Airbnb has to offer.

About Airbnb

Airbnb Inc (ABNB) is an online rental marketplace that brings together people offering short-term rentals, hosts, and people looking for a stay [1]. It was founded in 2008 by Brian Chesky, Joe Gabbia, and Nathan Blecharczyk to offer travelers a distinctive and budget-friendly alternative to conventional hotels or resorts.

At the time of its inception, Airbnb pioneered the novel idea of people converting their secondary homes into a source of income by hosting travelers. Its founders developed this idea by renting air mattresses in their San Francisco apartment during a design conference to make some extra cash. 

After observing an increase in the demand for short-term rentals, they created a platform enabling users to rent out their homes or spare rooms to travelers. Airbnb has now disrupted the traditional hospitality industry and, over the years, has seen a growth in the sector by accepting outside investment.

Today, Airbnb offers various novel accommodations, including apartments, houses, and castles. 

Noteworthy Investments

Airbnb also has investments in many companies that share its values and principles. Here are some examples: 

  • In November 2017, Airbnb invested $13 million in Resy, a restaurant reservation and booking platform. With this partnership, Airbnb enables guests to dine like locals by making reservations [2]
  • In April 2019, Airbnb championed a $160 million investment round in Lyric, a hospitality startup specializing in short-term rentals in multifamily apartment buildings [3]
  • In late 2019, Airbnb invested $11 million in Zeus Living, which provides furnished housing for business travelers. With this partnership, Airbnb offers a uniform standard for all long-term business guests worldwide [4]
  • In 2020, Silver Lake and Sixth Street Partners invested $1 billion in Airbnb through debt and equity, which helped the company weather the COVID-19 pandemic [5].
  • In 2021, Airbnb announced it would invest $100 million in a new venture fund called the Airbnb Host Endowment [6]. The fund will invest in affordable housing and other initiatives that benefit Airbnb hosts and their communities.

As of this writing, Airbnb has over 4 million hosts worldwide.  It also has over 6 million listings on its app, serving more than 800 million guests. It has a presence in 100,000+ cities worldwide and retains about 7,000 employees. That makes it one of the world’s largest and most successful sharing economy companies.

Common Airbnb Terminology

Here are some common terms you may encounter while using Airbnb services:

  • Host:  Anyone listing their property or space on Airbnb for rent.
  • Guest: Anyone renting a property or space from a host on Airbnb.
  • Listing: Information and photos that describe a rental property or space on Airbnb.
  • Reservation: An agreement between a host and guest to rent the host’s property or space.
  • Superhost: A designation given to highly-rated and experienced hosts on Airbnb.
  • Instant Book: Allows guests to book a listing without the host’s approval.
  • Airbnb Plus: This is a collection of listings on Airbnb that offer exceptional quality and comfort.
  • Airbnb Experiences:  These are unique activities hosted by locals that guests can book to explore a city or area.
  • Cleaning fee: Hosts charge this fee to cover the cleaning of their listing after a guest’s stay.
  • Service fee: Fees charged by Airbnb cover the cost of operating the platform and providing support to hosts and guests.

Stock History

Here is a short recap of Airbnb’s stock performance in recent years.

Initial Public Offering (IPO)

Airbnb first went public on December 10, 2020, via an IPO on the NASDAQ exchange with the ticker: ABNB. The IPO attracted investment that raised close to $3.5 billion, giving Airbnb a valuation of over $45 billion [7]. The IPO was the largest in the market that year.

Although the IPO had a target price of $68 per share, Airbnb opened at $146 on the NASDAQ. The price rallied to $165 before closing at $144.71 [8]. This price jump earmarked Airbnb’s stunning recovery from the negative effects the COVID pandemic had on its business earlier that year.

Price Movements

In the months following the IPO, Airbnb’s stock price encountered volatility, seeing a series of highs and lows. For instance, in May 2021, Airbnb experienced a decline in its stock price, dropping by over 18.7% [9]. However, the company’s stock price later rebounded slightly when management announced over 100 upgrades to its platform.

Figure 1: Airbnb price chart. Image obtained from TradingView.

Its limited shares availability and high demand for its stock was the vital driver of the mid-2021 price surge. 

Stock Trading Information 

Here is key information about the Airbnb stock that could come in handy for traders:

  • DIS trading information 
  • Primary exchange: NASDAQ
  • Ticker: ABNB
  • Country: U.S.
  • Currency: USD
  • Trading hours:
    • Main: 9.30am to 4pm ET, Mon to Fri
    • Pre-market: 4am to 9.30am
    • After-market: 4pm to 8pm

Why Trade Airbnb? 

Considering an investment in ABNB stock? Here are some factors that may be in your favour:

  • Growing demand for travel and vacation rentals
    Many countries around the world have eased travel restrictions, and demand for Airbnb vacation rentals is constantly increasing. Demand for newer and more exciting stays and experiences will drive higher revenue and earnings for Airbnb, which may also fuel demand for its stock and increase its price on the NASDAQ.
  • High brand recognition
    Airbnb is a reputable brand with a devoted customer base. As it increases its services worldwide, Airbnb can sustain a competitive edge in the vacation rental industry. Moreover, it already has a massive user base that continues to grow.
  • Innovative business model
    Airbnb has upended the conventional hotel industry and carved out a new market niche with its product. That has enabled the company to stay competitive across multiple markets, despite not owning homes itself. 
  • Positive analyst sentiment
    Many analysts have a positive outlook on ABNB stock, citing factors such as the company’s growth potential and market share in the vacation rental industry. 
  • Individual sentiment
    If you, as an individual investor, have a positive sentiment toward Airbnb and believe in the company’s growth potential, this could be a reason to trade ABNB stock. However, remember that trading ABNB or any other type of stock carries risks, and there are no guarantees of success.

What can affect the ABNB stock price?

Many forces and factors can cause the price of ABNB stock to change. Here are some: 

  • Earnings
    Earnings are essential elements in determining a company’s stock price. Often, investors check the financial statements for profits or sales. It’s crucial to assess if a stock is undervalued or overvalued. A company’s stock price may increase if it reports improving financial results.
  • New products or services
    Introducing new products or services can move the stock prices of ABNB up or down, depending on how customers and investors receive them. Also, new products or services may improve the company’s revenue growth and profitability.
  • The number of bookings and units sold
    Airbnb revenues come from charging a commission on each booking made through its platform. The more bookings the company receives, the higher its revenue and earnings. So, an increase or decrease in the number of bookings and units sold can significantly impact ABNB’s stock price.
  • Competition
    As the travel and vacation rental industry becomes more competitive, Airbnb’s stock price could be affected. Some investors might worry about Airbnb’s capacity to maintain its revenue growth and profitability if it loses market share to its rivals.
  • Economic conditions
    Broader economic conditions may also affect Airbnb’s stock price. If the economy is strong, consumers may be more likely to travel and book vacation rentals, which could benefit Airbnb. Conversely, recessions reduce the number of customers who may travel and could hurt the business’s revenue and earnings.
  • Regulatory changes
    Changes such as taxes or restrictions on short-term rentals can impact Airbnb’s business. Depending on the taxes or restrictions, hosts may house more travelers, and the stock price may fall or increase.
  • Sentiment
    Individual and general investor sentiment toward the stock and the company can also impact the stock price.
  • Positive news
    News about the company or a favorable outlook from analysts or investors could increase the stock price. However, negative news or a bearish outlook could lead to a decline in the stock price.

Start Trading ABNB stock commission-free with Vantage

Looking to trade ABNB shares via Contracts for Difference (CFDs)? Vantage Markets is the place to go. Access ABNB and over 500 other U.S. listed company stock CFDs through Vantage and trade commission free. You can use expert advisors or trade your own long or short strategy on Amazon and other blue-chip stocks for $0 per trade.

References

  1. “How Airbnb Works – Investopedia” https://www.investopedia.com/articles/personal-finance/032814/pros-and-cons-using-airbnb.asp Accessed 14 July 2023
  2. “Airbnb invests in restaurant reservation app Resy – Techcrunch” https://techcrunch.com/2017/01/09/airbnb-invests-in-restaurant-reservation-app-resy/ Accessed 14 July 2023
  3. “Lyric raises $160 million in debt and equity to power the next generation of hospitality – Techcrunch” https://techcrunch.com/2019/04/17/lyric-raises-160-million-series-b-led-by-airbnb/ Accessed 14 July 2023
  4. “Airbnb invests as Zeus corporate housing raises $55M at $205M – Techcrunch” https://techcrunch.com/2019/12/09/airbnb-zeus/ Accessed 14 July 2023
  5. “Airbnb secures $1 billion investment from Silver Lake, Sixth Street – Reuters” https://www.reuters.com/article/us-airbnb-funding-idUSKBN21O2V9 Accessed 14 July 2023
  6. “Update on the Airbnb Host Endowment and Our Commitment to Communities – AirBnb News” https://news.airbnb.com/update-on-the-airbnb-host-endowment-and-our-commitment-to-communities/ Accessed 14 July 2023
  7. “Airbnb aims for $35 billion valuation in long-awaited IPO – Reuters” https://www.reuters.com/article/us-airbnb-ipo-idUSKBN28B5CC Accessed 14 July 2023
  8. “Airbnb IPO: Airbnb opens at $146 per share, soaring 114.7% above IPO price – Yahoo! Finance” https://finance.yahoo.com/news/airbnb-shares-open-for-trading-initial-public-offering-ipo-coronavirus-pandemic-183858304.html Accessed 14 July 2023
  9. “Here’s Why Airbnb Stock Was Down Almost 19% in May – The Motley Fool” https://www.fool.com/investing/2021/06/05/heres-why-airbnb-stock-was-down-almost-19-in-may/ Accessed 14 July 2023
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