Some time after market-open today, Airbnb stock will become available to purchase on the Nasdaq stock market. Should you buy?
Dec. 10, 2020
Going public is all the rage in 2020, with big hitters like Snowflake, Lemonade, Doordash and more all initiating initial public offerings (IPOs) over the past few months.
Airbnb (NASDAQ: ABNB) is set to become the next of these companies to issue shares for public sale in order to raise capital.
What is Airbnb’s stock symbol?
Airbnb will begin trading some time after 9:30 am EST on the 10th of December, 2020 under the ticker symbol ABNB.
How much does Airbnb stock cost per share?
On Tuesday, Airbnb raised its share price range to between $56-60 per share – up from a previous range of between $44 to $50 estimated previously.
However, it has since been reported that the company priced its shares at $68 apiece last night, which would value it at around $47 billion. From this, the company could hope to raise over $3.5 billion from the event.
This valuation makes it one of the largest IPOs of 2020. Airbnb’s targeted valuation is well more than double its recent valuation of $18 billion back in April and is also a notable premium to the $31 billion price tag it received during its fundraising period in 2017.
What does Airbnb do?
That’s a very important question for investors to know before investing in a company. First, let’s hear from their own mission statement:
”To help create a world where you can belong anywhere and where people can live in a place, instead of just traveling to it.”
Airbnb is an online marketplace that connects individuals who want to rent out their homes or rooms with people who are looking for accommodation in that area. As of September 2020, it covers more than 100,000 cities and 220 countries and regions globally, with over 5.6 million active listings.
Is Airbnb profitable?
Unlike many other tech unicorns, Airbnb has turned a profit. In the third quarter of 2020, Airbnb made $219 million in profit on revenue of $1.34 billion. Despite these positive numbers, the company’s earnings were actually down nearly 19% year-over-year from a reported $227 million in profit on revenue of $1.65 billion in 2019.
Airbnb has an enormous potential market, with the world spending $4.7 trillion on travel in 2019 alone. In the company’s IPO prospectus, it claims to have a total addressable market of $3.4 trillion. Airbnb has handled the devastating impact of COVID well, pivoting from its main business model to offering getaways that are within driving distance of people’s homes.
Taking into account traveling and holiday rentals should assume to be somewhat normal in 2021, Airbnb looks to be making a strong start to public life.
Should I buy shares in Airbnb?
Airbnb stock looks promising, even though the pandemic may have resulted in revenue dropping to $3.4 billion in the first nine months of 2020, but sales are still expected to increase to $6 billion by 2022.
Analysts on Wall Street have often resorted to such ‘short-termism’ by only valuing a company based on its most recent quarterly earnings instead of possible substantial long-term growth. Airbnb has become the Uber of the hotel industry and has a massive total addressable market as well as huge brand recognition. Though it might be a bit too risky for some, and there will be a lot of volatility around its IPO, it’s clear that this no longer the simple couch-surfing startup once was.
- Who founded Airbnb?
The company was founded in 2008 by Brian Chesky, Nathan Blecharczyk, and Joe Gebbia.
- Does Airbnb pay well?
Airbnb pays its employees an average of $110,954 a year.
- How many people are on Airbnb?
Airbnb has around 5.6 million listings from 4 million hosts.
A MyWallSt subscription gives you access to over 100 market-beating stock picks and the research to back them up. Our analyst team post daily insights, subscriber-only podcasts and the headlines that move the market. Get your free access now!
MyWallSt operates a full disclosure policy. MyWallSt staff currently holds long positions in companies mentioned above. Read our full disclosure policy here.