A substantial number of startups were born during the previous financial crisis, in 2008. Some of those businesses have grown to be unicorns, or companies worth more than $1 billion. Uber, Slack, Cloudflare, Pinterest, Square, Twilio, and Airbnb are just a few of the companies that sprung up during that time. One of the most well-known names on the list is Airbnb. As a result, investors began to explore how to purchase Airbnb stock.
Is it, nevertheless, feasible to purchase Airbnb stock? If that’s the case, do you have any reservations about investing in Airbnb? In this blog post, we’ll go over everything about Airbnb, including what makes it unique and any potential investors should be aware of.
What Is Airbnb and How Does It Work?
Airbnb is a worldwide online community marketplace where individuals can list, discover, and book rooms. The company was created in 2008, in the midst of the financial crisis, and swiftly gained traction, completely altering the hospitality industry.
Airbnb links travellers looking for authentic experiences and places to stay with hosts around the world who offer distinctive, inspiring environments.
According to reports, Airbnb has 5.6 million listings in over 100,000 cities around the world as of September 30, 2020.
What Makes Airbnb So Unique?
Before the epidemic arrived in early 2020, there were a number of extremely encouraging indicators regarding Airbnb’s success.
Since its founding in 2008 till April 2020, Airbnb has raised $5.8 billion in ten fundraising rounds. Before the outbreak, the corporation was worth $31 billion, but it was only worth $18 billion in April, according to reports.
Before the COVID-19 problem, Airbnb’s financial reserves were extremely healthy. In 2019, they still had roughly $3,5 billion in the bank from the $4.6 billion they had raised up to that point. Airbnb, unlike other startups such as Uber, produced a lot of cash flow. In fact, according to EBITDA (profits before interest, taxes, depreciation, and amortisation), they were profitable in 2017 and 2018. Aside from that, income continued to rise at a quick rate. According to reports, Airbnb’s revenue increased by 40% in 2018 and 30% in Q1 2019.
They raised another $1 billion in a finance and equity arrangement with Silver Lake and Sixth Street Partners in April 2020. Although it’s unknown what this fresh round of money is for, it could be related to Airbnb’s earnings being impacted by the COVID-19 outbreak.
Since then, and as a result of COVID-19’s ongoing effects, the company has been forced to lay off 25% of its workforce in May 2020 in order to get through this crisis. It has also put a halt to investments in hotels, transportation, and luxury stays for the time being in order to keep expenditures under control during these trying times.
When the economy improves, Airbnb should be able to start looking ahead and reactivating some of the initiatives that have been put on hold.
What Is the Best Way to Invest in Airbnb Stock?
Expansion into the transportation industry is one of the most promising projects that had to be put on hold. Airbnb engaged senior aviation industry executive Fred Reid as its global head of transportation before the crisis. Fred was the former CEO of Virgin America and will now serve as Airbnb’s Chief Transportation Officer. This suggests that Airbnb could start including transportation alternatives in its bookings at some time in the future. As a result of this decision, Airbnb will be able to make a dent in the $6 trillion travel sector. Even if Airbnb simply captures a single-digit percentage point of that market, it would be worth ten times as much as it is now.
How do I purchase Airbnb stock?
Airbnb’s initial public offering (IPO) took place in December 2020, and company shares are currently traded on the stock market under the ticker ABNB.
The company went public at a price of $68 per share, but it quickly rose to more than $110 a share. The ABNB stock price was at $177 at the time of publication. Given the Covid-19 outbreak and its impact on Airbnb’s company, their price has skyrocketed.
Given Airbnb’s current financial health and future expansion ambitions after Covid-19, it’s reasonable to believe that part of that prospective growth has already been factored in.
Do you have any reservations about Airbnb?
Right now, there are two big concerns: regulatory and safety.
Because of Airbnb’s impact on the regular rental property market, there is a regulatory issue. The number of houses available for regular rent has decreased as many homeowners make more money on Airbnb than they do with traditional rent. This decrease raises the rental price of existing houses. Citizens will find it more difficult to rent properties as a result of this.
Airbnb is addressing the regulatory issue by collaborating with regulators to prevent the problems that Uber just encountered.
According to certain studies, renting out a home on Airbnb can be risky for hosts in terms of safety. Although there have been few safety concerns, they must be addressed.
Airbnb has been taking effort to alleviate those issues in order to remedy the situation, which is also positive.
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Frequently Asked Questions
What exactly is Airbnb?
Airbnb is a worldwide online community marketplace where individuals can list, discover, and book rooms.
What makes Airbnb unique?
Airbnb has a slew of really encouraging indicators. Since its founding, Airbnb has raised $4,4 billion. In 2019, they still had roughly $3,5 billion in the bank out of the $4,4 billion. More information can be found in the article.
What is the best way for me to invest in Airbnb stock?
To purchase Airbnb shares, go to your stock broker and look up the ticker ABNB.
When did Airbnb’s stock go public?
Airbnb’s first public offering (IPO) took place on December 9, 2020, and its shares began trading the next day, on December 10.