Is the Airbnb IPO a Buy?
Let’s get right to the question of the week for a lot of investors: Is the Airbnb IPO a buy?
Airbnb (Nasdaq: ABNB) is a software platform that allows homes and apartments to be used as short-term rentals, and the company is finally coming to Wall Street with its initial public offering. This comes just a day after one of the year’s other huge IPOs with DoorDash.
Airbnb expects to offer shares at a range between $56 and $60 per share beginning today. That’s an upgrade from its earlier target of $44 to $50 a share — which means demand is high.
At $60 per share, the Airbnb IPO would sell $3.1 billion in stock, giving it a fully diluted valuation of $41.8 billion including securities like options and restricted stock units.
This pushes the Airbnb IPO well above its $18 billion valuation after a round of fundraising back in April during the early weeks of the COVID-19 pandemic.
So if you’re reading this then you’re probably wondering if the Airbnb IPO is a buy…
Is the Airbnb IPO a Buy?
WealthPress’ Jeff Yastine
I’ll be frank. If you’re just looking for the juice — the excitement of day trading and getting in on the ground floor as far as when it’s publicly available — then be my guest. Airbnb is one of the most anticipated IPOs of the entire year.
You’ll have a lot of company as people pile into the shares.
And there are some good things going for Airbnb. Analysts project 35% growth per year and upward of $6 billion in revenue for 2022 — and the company basically has a monopoly at this point.
But due to limited travel because of the coronavirus pandemic, 2020 hasn’t been great for Airbnb’s bottom line. Revenue was down over 70% during the second quarter, and the company laid off 25% of its staff.
Not great!
Of course, as we begin to open back up, Airbnb’s fortunes are sure to change. Check out my short video on the Airbnb IPO and let’s discuss the opportunity further. Are you considering adding this tech stock to your portfolio? Why or why not? Let us know in the comments below.
And as always, send your investing questions to jeff@yastine.com. You can also follow me on Twitter and Facebook.
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