On Thursday 10 November, Airbnb had fluffed up the cushions, wiped down the surfaces and opened its doors to public investors, but the stock may be a bigger risk than traders realise. Before you buy stocks in Airbnb, consider how this company handled its staff and its balance sheet during the coronavirus pandemic.
You can buy Airbnb shares on NASDAQ.
Thursday, December 10: Airbnb stock opened for trading at $146 (£110.36) and closed at $144.71 (£109.38), 111% above the offering price.
Wednesday, December 9: Airbnb will price shares of its IPO at $68 each (£51.40), the Wall Street Journal reports.
Monday, December 7: Airbnb updates its filing to state a projected share price of $56 to $60.
Thursday, December 3: Airbnb expects to price its IPO on Dec. 9 and start trading Thursday, Dec. 10, Barron’s and the Wall Street Journal report.
Tuesday, December 1: Airbnb updates its filing to state a projected share price of $44 to $50.
Monday, November 16: Airbnb’s S-1 filing is released to public shareholders, revealing the stock’s ticker symbol: ABNB.
Thursday, November 12: Bloomberg reports that Airbnb may pursue a dual listing on the Nasdaq and the Long-Term Stock Exchange: a new Silicon Valley exchange focused on environmental and social investing.
Tuesday, November 10: Airbnb’s public filing is expected to be delayed until next week. Reports suggest that the decision is related to the ongoing election coverage that could overshadow the filing.
Thursday, November 5: Airbnb is expected to make its SEC filing public next week.
Wednesday, August 19: Airbnb has confidentially filed to go public.
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What we know
Earlier this year, Airbnb expressed interest in becoming a publicly traded company. And on 19 August 2020, it confidentially filed a draft registration statement for an IPO with the U.S. Securities and Exchange Commission (SEC). A recent report in Reuters suggests that the company may be planning to make its filing public next week.
The company planned to raise US$3 billion (about £2.3 billion) from the offering, potentially valuing the company above the US$30 billion mark (around £22.6 billion).
Airbnb intended to go public on the NASDAQ with Morgan Stanley and Goldman Sachs as the lead underwriters for the deal. At the time, we had no news of how many shares would be available or at what price.
Should you invest in Airbnb?
Perhaps more important than when Airbnb shares will go live is whether backing this holiday rental platform is a practical investment.
In 2019, Airbnb was valued at US$35 billion. This year saw that figure sink to US$18 billion. In fact, the Wall Street Journal reports that the company had to reach for a US$1 billion loan in April 2020 from private investors to make up its shortfall. And in May 2020, Airbnb laid off 25% of its staff – nearly 2,000 employees – in an effort to cut costs and weather the economic downturn. Like many travel companies, it has been heavily affected by COVID-19 and it’s too early to say what a recovery might look like or when it could happen.
Do your due diligence
On the flip side, Airbnb’s popularity could help its stock market debut. It’s a household name and even speculation of an IPO launch has got heavy media coverage, with Bloomberg, the Wall Street Journal, CNN and countless others covering the announcement. That coverage could help the IPO gain interest.
Pre-pandemic, many investors would have jumped at the opportunity to claim a slice of the Airbnb pie. But it’s impossible to predict whether the platform’s popularity will be enough to help it overcome doubt cast by recent financial decisions. If you’re considering investing, it’s worth more research into the company’s financials before deciding if it’s worth the risk.
How to buy shares in Airbnb
To buy shares in Airbnb, you need a brokerage account that lets you trade US shares.
Compare share trading platforms.If you’re a beginner, look for a platform with low commissions, expert ratings and investment tools to track your portfolio. Narrow down top brands with ourcomparison table.
Open and fund your chosen account.You’ll need to complete an application with your personal and financial details, such as your national insurance (NI) number and bank information.
Search for Airbnb.Find the stock by name or ticker symbol. Research its history to confirm it’s a solid investment against your financial goals.
Decide on how many to buy.Weigh your budget against a diversified portfolio that can minimise risk through the market’s ups and downs. You may be able to buy a fractional share of Airbnb, depending on your broker.
Purchase your stock.If the stock is your desired price, then you can go ahead and buy some.
Check in on your investment.Congratulations, you own a part of Airbnb. Optimise your portfolio by tracking how your stock – and even the business – performs with an eye on the long term. You may be eligible for dividends and shareholder voting rights that can affect your stock.
Airbnb was founded in 2008 and is headquartered in San Francisco, California. Through its online platform, it connects hosts in over 191 countries with holidaymakers seeking local accommodation. You can search for places to stay by numerous filters and metrics, relying on listing details and the feedback of fellow travellers to narrow down your options.
Airbnb is not an accredited business with the Better Business Bureau (BBB), from which it receives an F rating for failing to respond to customer feedback. The company has racked up 2,111 complaints in the last 12 months and its lack of responsiveness has led to a BBB alert being placed on the company. The Better Business Bureau states that Airbnb’s unresponsiveness is due to company layoffs and that outstanding complaints may continue to go unanswered for the foreseeable future.
Airbnb’s poor reputation with the Better Business Bureau is echoed by its disappointing TrustScore of 1.6 out of 5 after 6,213 reviews on Trustpilot. Many negative reviews target Airbnb’s cancellation policy in response to COVID-19, with many guests worldwide failing to receive a refund for cancelled trips following government-imposed travel restrictions.
As of 12 August 2020, Airbnb’s official policy on trip refunds states that bookings made after 14 March 2020 are not eligible for the company’s extenuating circumstances policy.
Results of similar IPOs
Airbnb has a unique business model, so there aren’t any stocks that serve as a direct comparison. But it falls within the travel sector, which has seen a lot of fluctuation lately.
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To buy stock, you’ll need to open a brokerage account. Compare your options using the table below to find the best fit.
All investing should be regarded as longer term. The value of your investments can go up and down, and you may get back less than you invest. Past performance is no guarantee of future results. If you’re not sure which investments are right for you, please seek out a financial adviser. Capital at risk.
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