Airbnb Should Have a Spectacular IPO Today.
Yesterday, Airbnb priced the IPO at $68/share with a market cap of $47 billion. According to the NY Times, that makes Airbnb’s IPO the largest of the year, with over $3 billion raised.
Warning: Do NOT Place a MARKET ORDER for the Airbnb IPO (symbol: ABNB). The share prices are expected to surge. You want to be sure that you get the price you want.
This could bode well for the first few days of trading, particularly when you consider that DoorDash’s shares soared 86% yesterday on the first day of trading. Airbnb originally hoped to sell shares for $44-$50/share. The increase to $68/share indicates good investor appetite for the home-sharing company. By contrast, when We Work tried to launch its IPO last year, the company’s value imploded, the IPO was scratched and the CEO was canned. Airbnb had to scrap its March 2020 IPO plans this year. However, investor interest has returned (even if revenue is still down 18% year over year).
$47 Billion or $18 Billion
When Airbnb had to raise money in April of this year, the company value sank to just $18 billion. So, is it worth $47 billion or $18 billion? Is the potential marketplace really $1.5 trillion (the serviceable market they anticipated pre-pandemic)? How much longer will Airbnb be cash negative? (The company has never turned a profit in 13 years of business.)
What Could Go Wrong?
There are still the pesky issues of:
All of which indicate that Airbnb is a risky bet in the mid-term. (Again: today will be explosive for Airbnb.) Futures of DoorDash already forecast an implosion of 50% or more.
Learn more in my Airbnb blog & videoconference (links below).
Airbnb Courts Hosts to Invest in the IPO
Airbnb IPO Free Videoconference
Would you like to learn how to construct your own Stock Report Card and pick stocks like a No. 1 stock picker? Call 310-430-2397 or email info@NataliePace.com to register for our Jan. 16-18, 2021 Online Investor Educational Retreat.
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Natalie Wynne Pace is an Advocate for Sustainability, Financial Literacy & Women's Empowerment. She has been ranked as a No. 1 stock picker, above over 835 A-list pundits, by an independent tracking agency (TipsTraders). The ABCs of Money remained at or near the #1 Investing Basics e-book on Amazon for over 3 years (in its vertical), with over 120,000 downloads and a mean 5-star ranking. The 4th edition of The ABCs of Money was released on October 17, 2020.
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Natalie Pace is the co-creator of the Earth Gratitude Project and the author of The Power of 8 Billion: It's Up to Us, The ABCs of Money, The ABCs of Money for College, The Gratitude Game and Put Your Money Where Your Heart Is. She is a repeat guest & speaker on national news shows and stages. She has been ranked the No. 1 stock picker, above over 830 A-list pundits, by an independent tracking agency, and has been saving homes and nest eggs since 1999.