Latest updates
Thursday, November 5: Airbnb is expected to make its SEC filing public next week.
Wednesday, August 19: Airbnb confidentially filed to go public.
Airbnb has filed an IPO — here’s how to buy in once the stock goes live
Airbnb is reportedly planning to check into the New York Stock Exchange, find out the facts.
Airbnb is ready to fluff up the cushions, wipe down the surfaces and open the doors to public investors, but the stock may be a bigger risk than traders realise. Before you add this IPO to your watch list, consider how this company has handled its staff and its balance sheet during the coronavirus pandemic.
What we know
Earlier this year, Airbnb expressed interest in becoming a publicly-traded company. And on August 19, 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.
While there’s no set date yet for the IPO, it’s expected to price in December. And the company plans to raise $3 billion USD (about £2.3 billion GBP) from the offering, potentially valuing the company above the $30 billion mark (around £22.6 billion GBP)
Airbnb intends to go public on the Nasdaq with Morgan Stanley and Goldman Sachs as the lead underwriters for the deal. But we’ve got no news of how many shares will be available or at what price. If you’re interested in investing in Airbnb, you’ll need to keep an eye out for developing news around the filing and be prepared with a brokerage account.
Should you invest in Airbnb?
Perhaps more important than when Airbnb shares will go live is whether backing this vacation rental platform is a practical investment.
In 2019, Airbnb was valued at $35 billion. This year saw that figure sink to $18 billion. In fact, the Wall Street Journal reports that the company had to reach for a $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’s 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 gotten 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 when it goes public
Once Airbnb goes public, you’ll need a brokerage account to invest. Consider opening a brokerage account today so you’re ready as soon as the stock hits the market.
- 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 our comparison 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 minimize 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. Optimize 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 compared
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 accommodations. 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 canceled trips following government-imposed travel restrictions.
As of August 12, 2020, Airbnb’s official policy on trip refunds states that bookings made after March 14, 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.
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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. Capital is at risk.
We show offers we can track - that's not every product on the market...yet. Unless we've said otherwise, products are in no particular order. The terms "best", "top", "cheap" (and variations of these) aren't ratings, though we always explain what's great about a product when we highlight it. This is subject to our terms of use. When you make major financial decisions, consider getting independent financial advice. Always consider your own circumstances when you compare products so you get what's right for you.
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