Airbnb has made a name for itself in the travel and hospitality business. The company currently boasts of having more than four million hosts and 800 million guest arrivals, making them a leading brand in the hospitality industry. While the company continues to outperform expectations, what makes things even more exciting is the company’s recent IPO, which has now made it possible for investors to buy into the company’s future.
With the covid-19 pandemic losing its steam, experts predict a resurgence of travel and leisure. With this insight, now is an awesome time to add Airbnb stock to your investment portfolio. Here is everything you need to know about Airbnb stock.
What is Airbnb?
Airbnb (ABNB) is a leading online marketplace that seamlessly connects people who would want to rent out their homes to people looking for accommodations in specific areas.
The company has come a long way since it was launched in 2007. The co-founders of Airbnb came up with the idea of inviting guests to sleep on their air mattresses in their living room for a fee. Seeing the overwhelming demand, they decided to set up a company to take advantage of this opportunity. What used to be an idea has now turned into a full-fledged reality.
According to recently released data, Airbnb has over 6 million listings in more than 100,000 cities and towns. More so, they operate in over 220 countries, making them one of the largest hospitality brands.
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Trading with financial instruments carries high level of risks that is not suitable for all investors. Before making any investment decisions, you should seek advice from independent financial advisor to ensure you understand the risks involved.
Trading with financial instruments carries high level of risks that is not suitable for all investors. Before making any investment decisions, you should seek advice from independent financial advisor to ensure you understand the risks involved.
Why was Airbnb an instant success?
Airbnb has revolutionized the hospitality industry and honestly, we aren’t surprised. With such a brilliant model, there is no reason why the company should not succeed. Before 2008, travelers needed to book a hotel or hostel when visiting another city.
But with Airbnb, travelers have a better option when it comes to arranging accommodation. As we highlighted earlier, the idea behind Airbnb is genius. The platform has made it possible for homeowners to make extra bucks, by renting their spare homes or room to people visiting the area. Homeowners or hosts using Airbnb, typically advertise their rentals to millions of travelers worldwide.
What makes Airbnb different from other types of accommodation is that it offers a homey experience, something you won’t get with a regular hotel or hostel. More so, Airbnb is way cheaper than what hotels typically charge.
When did Airbnb go public?
Airbnb had its IPO on December 10, 2020. The move saw the company’s stock soar by over 112% on the first day of trading, making it one of the best-performing stocks to have been listed in the same period.
Airbnb opened at $146 per share on its first day of trading. Its performance on the day saw it double the $68 per share price set for its IPO.
Even though the company decided to go public at the peak of the pandemic, it’s pleasantly surprising to see how the company’s stock performed at that time.
Following the company’s stock performance after going public, its market cap jumped to over $86.5 billion, effectively doubling the valuation it sought before its IPO. This effectively puts the company ahead of travel giant Booking, which has a valuation of $86 billion.
Here is how much an investment of $10,000 in Airbnb would have returned
Investors who got in during Airbnb’s IPO would be smiling to the bank right now. While Airbnb priced its IPO at $68 per share, it outperformed this when it opened for trading at $146 per share.
Even if you weren’t lucky enough to be included in the IPO itself, the $10,000 you invested in the stock when it opened for trading at $146, will be around $11,760, representing a 17.6% gain, which isn’t bad at all. Just to add, if you invested through a benchmark index like S&P 500, which gained 27% and up more than 30% in the same period, your $10,000 investment will now be worth well over $13,000.
With travel and leisure resuming following a protracted lockdown that has kept many people indoors, experts predict Airbnb stock to increase in value.
How to buy Airbnb stock online
Having given you an overview of everything you need to know about Airbnb, it’s time to show you how you can seamlessly buy Airbnb stock online. Let’s cut to the chase and bring you the juicy details.
Open a brokerage account
Before you can buy or trade Airbnb (ABNB), you’ll need to open an investment account, that’s if you don’t already have one.
When choosing a brokerage, you want to opt for brokers with no trading fees and low investment minimums.
If you’re not particularly sure about the best brokers to choose from, you can go through our list of the best investment apps and brokerages.
Most brokers typically provide you with an option to choose an account type that suits your trading requirements. The two most popular options are an individual retirement account (IRA) or a taxable investment account.
With IRAs, you get tax benefits. What’s cool about this type of account is that you get the opportunity to invest for your retirement. Depending on your investment goals and your situation, you have the option to choose between a traditional IRA, Roth IRA, or SEP IRA.
The only caveat with IRAs is that you incur taxes and penalties when you withdraw your investment before age 59 ½.
A taxable account on the other hand doesn’t offer the tax benefits that IRAs offer. Nonetheless, they have better flexibility when it comes to investment. And that’s because, with a taxable account, you can deposit as much money as you want. Not just that, you can also withdraw your profits any time you choose. Even when you make losses on your investment you can deduct some of your losses from your taxes by taking advantage of tax loss harvesting.
Consider how much you want to invest in Airbnb (ABNB)
Before putting your hard-earned money into Airbnb shares, you need to ask yourself four important questions:
- What’s your budget? Do you have ample money every month to cover your expenses? Do you have some spare cash to put in a retirement or emergency fund? If your answer to these questions is a yes, then you should have enough to put in an investment like Airbnb.
- What’s Airbnb’s current price? Stock and share prices are either appreciating or dropping. Nevertheless, you can always look at their recent price trends to have an understanding of how much each share might cost you. In the last couple of years, Airbnb prices have topped over $100 per share. What this means is that unless you opt for a broker that offers fractional share trading, it may be a little too expensive to load up on Airbnb stock.
- Do you have an investment strategy? Most investors have two or more investment strategies. While some investors don’t mind buying a lot all at once, others may prefer slowly accruing a small amount of Airbnb stock over time. The latter method is what’s called dollar cost averaging. This investment strategy entails investing a tiny amount regularly. What’s cool about this trading strategy is that you may end up paying less per share over time.
- What about your other investment? If you have been investing for something, there is every likelihood that Airbnb won’t be the only stock in your portfolio. To this end, you want to consider how your Airbnb stock jives with other shares you have in your investment portfolio. Here is the thing you need to know, Airbnb is a growth stock. Because of that, it isn’t consistently profitable. If you are a risk-tolerant investor and have the patience to hold a stock for a long time, then you should definitely add Airbnb to your investment portfolio.
Do your research
Before putting your hard-earned money in Airbnb or any other company stock for that matter, you need to do your due diligence. First, you need to take some time to review the company’s financial records, future plans, and corporate structure. This way, you’ll be comfortable and confident that your investment will yield results
Publicly traded companies like Airbnb are required by law to file their financial statements with the U.S. Securities and Exchange Commission (SEC) on a quarterly and annual basis. With this information available publicly, you can review Airbnb’s annual reports and quarterly filings on its investor relations page or SEC’s database. Besides looking at the company’s financial statements, you can also consider expert analysis provided by your broker or third-party platforms like Morningstar.
Place an order
After doing your due diligence, you can proceed to place your order. To do this you need to log into your brokerage account or investment app. Once you’re logged in, you can simply enter the Airbnb ticker symbol (ABNB) and choose the number of shares you’d like to buy or the dollar amount you want to invest.
When placing your order, you may have to choose between different order types, depending on what works for you. By default, most people will choose what’s called a market order. When you choose this order type, your broker will execute your trade at the real-time market price for Airbnb stock.
You also have the option to go for a limit order. With this type of order, your trade will be executed when prices reach your preset price. Limit orders are a great option if you think the price of an asset will go lower than it is currently trading.
Keep track of your account
When investing in an individual stock like Airbnb, it’s not always a good idea to set things and abandon them. Instead, the right thing to do is check your investment progress from time to time.
When monitoring your account, a good place to start is to track the price changes of your Airbnb stock over time. For this, you want to track major benchmarks like S&P 500 and Nasdaq 100. Again, you want to keep track of how the company’s financial situation changes over time, by keeping track of public filings and industry reports.
How to buy Airbnb stock on eToro
Now that you know how to invest in Airbnb stock, we want to use this opportunity to show you how you can buy Airbnb shares on an exchange like eToro. And just so you know, the process is pretty straightforward and only takes a couple of minutes. Here, check out how anyone can buy Airbnb stock on eToro.
Create an eToro account
If you don’t already have an account with eToro, you’d have to open one to be able to buy Airbnb stock. As we reiterated earlier, the process is simple. If you already have an account with eToro, you can simply log in.
During the signup process, you’ll be required to provide basic information like name, email address, and phone number. Nonetheless, to fund your eToro trading account, you’ll need to provide additional info so the broker can verify your identity.
Complete your eToro profile
If you’re opening your account for the first time on eToro, you’d be required to complete your profile. For customers who have an existing account, you can skip this process. Completing your profile only takes a couple of minutes and is a requirement by most brokers as per AML and CTF regulations. With your profile now complete, you can proceed to other aspects.
Fund your trading account
After completing your eToro profile, you’ll need to fund your trading account to be able to buy some Airbnb Stocks. We love eToro because they have a low minimum deposit requirement. To start trading on the eToro platform, you’ll need to make a minimum deposit of $200 or it’s equivalent in other currencies.
And just to add, eToro supports up to 8 popular deposit methods, including PayPal, wire transfer, UnionPay, credit or debit cards, Neteller, Skrill, and WebMoney. So, funding your account is super easy.
Tip: If you’re not fully convinced or you don’t feel ready to invest real money, you can test the waters with eToro’s virtual portfolio feature. This option lets you trade your favorite stocks without putting in real money. And as you gain experience and feel more comfortable, you can switch to a real portfolio.
Buy Airbnb Stock
With your eToro account now funded, you can proceed to buy Airbnb stocks. While eToro lets you buy Airbnb shares seamlessly, you can also decide to short it. Keep in mind that the direction you decide to take is based on current market sentiments or direction. Here is how you can buy Airbnb stock on eToro.
Navigate to eToro’s unique search bar, which sits at the top of the screen. Enter the ticker name associated with Airbnb stocks: ABNB. Hit the trade now button to place your order. A new window should pop up, allowing you to make changes to different parameters. It’s that easy.
