All the information I express regarding the Airbnb stocks is what I was able to gather from Airbnb’s submission to the SEC. The truth is I was waiting for this IPO for a long time, and it is surely the most important IPO of 2020. The IPO is going to take place in December without a clear date being published and will be listed as (NASDAQ: ABNB). I will be covering the following matters:
Airbnb is a vacation rental online business, that allows people worldwide to find places to stay either for traveling purposes or business purposes. It is used for short-term stays meaning temporary accommodation. It was founded in 2008 and has its headquarters in San Francisco, California, United States. It has more than 7 million homes listed, and it operates in 100,000 cities.
Does Airbnb own the properties listed? No, it doesn’t own any of them, in fact, people like you and me that have a residential home can list it on Airbnb after successfully complying with its rules. This helps the homeowners to achieve higher occupancy rates since it gives them “automatic advertising” when they appear on the searches without them having to spend money on advertising. Of course, Airbnb doesn’t do that for free! It charges them 14 – 16% whereas in some other cases 20% to those who offer experiences and this fee is deducted from the host’s payout. This fee can vary from country to country.
Impressive how such a “simple” idea – two friends renting their house to help them pay their rent, twelve years later turned into a business worth $18 billion. Before the coronavirus pandemic, Airbnb was worth $38 billion.
I believe that from now on the Covid-19 impact on any business is very important to be mentioned for a thorough comparison of what it used to be and what may be again. According to Airbnb’s reports, in 2019 there was an increase of 32% $4.8 billion in its revenue and a 29% increase in the bookings to $29.4 billion. However, 2020 didn’t seem to be a good year considering the virus, revenues faced a decline of 32% to $2.5 billion and its bookings fell by 39% to $18 billion.
Needless to say, the net losses from 2018 to 2019 have seen a huge rise from $17 million in 2018 to $674 million by the end of 2019. Pandemic widened these losses even more for 2020 accumulating at $697 million losses until September 2020. The total deficit was $2.1 billion as of September 30, 2020.
These numbers are surely causing you to reconsider your investment in Airbnb so to spread your hopes up again Reuters estimates a valuation raise to $30 billion. Not to forget that Airbnb was valued $31 million in 2017 which is nothing to what it is valued now after the pandemic. In general, This IPO hopes to reverse this decline.
The company’s advantage over its competitors is surely visible for the following reasons:
Airbnb is 3 times bigger than Trip Advisor
Trip Advisor might be a competitor, but Airbnb has an advantage over it if you compare sizes which means Airbnb does not have to worry, at least for the near future.
It has a rapid growth
Comparing the percentage changes in the above chart, Airbnb has proved to be growing almost 10 times faster than Booking Holdings and 5 times fast than Expedia Group.
Airbnb is very liquid
According to Bloomberg it holds $2 billion cash in the bank which means it can help it overcome the losses and the negative events that bother their way.
Data provided by Statistica
Risk factors to consider:
Before the vaccine, I would have definitely said the third wave of Coronavirus, but after the vaccine news I am personally very positive that all this will be history soon, but this is a different article.
Investors need to consider all possible factors to form their decision. There is not a final price for the stock going IPO, but be sure we will notify you in our WhatsApp group once we have the final date. At the end of the day is all a belief and since people will “value” it on the market I believe they will give it quite a high value at least in the long term. It is on my personal portfolio list since the world is on track for a coronavirus free world.
I/we have no position in any stock mentioned. I wrote this article myself, and it expresses my personal opinions. I am not receiving any compensation for it, other than FDGT Academy. I do not have or had in the past any business relationship with any company that is mentioned in the above article.
I am a stock analyst/investor with prior experience and knowledge to BSc Accounting and Finance. After completing my degree and exposure to the accounting firms I decided that the direction I should choose is towards the Investment world. I completed my masters in Investment Management where it gave me solid fundamentals to build my career on. I have examined a lot of different aspects of investment, from REITS, derivatives, currencies, bonds, equity and hedge funds. I never stopped learning about the market which is why I can analyze and write articles for FDGT community always personally opinionated. My passion are green energy and electric vehicles stocks as a whole. I also had my share of analyzing the work form home stocks that are coming to take over in the upcoming years.
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This includes, but is not limited to, WhatsApp live group, daily live signals, premium Trade validator, and much more.
Don’t forget that after depositing with one of our regulated brokers, you are entitled to free lifetime access to our premium membership.
This includes, but is not limited to, WhatsApp live group, daily live signals, premium Trade validator, and much more.