Airbnb (NASDAQ: ABNB) Goes Public – Buy or Pass?

Home » Airbnb (NASDAQ: ABNB) Goes Public – Buy or Pass?

Airbnb (NASDAQ: ABNB) Goes Public – Buy or Pass?

A hot new IPO started trading this week that everyone needs to know about.

Airbnb (NASDAQ: ABNB), the popular vacation rental website began trading on the NASDAQ stock exchange on Thursday. This means shares are now available for regular investors to invest.

Airbnb had a pretty crazy few days. Shares were expected to begin trading at $68 but first trades happened around $145 and closed the week in this same area.

Here are some more details from CNBC and Jim Cramer.

CNBC’s Jim Cramer on Friday sharply criticized how investment bankers handled the recent initial public offerings for companies such as DoorDash and Airbnb, two tech companies that saw major pops in their stocks after they began trading this week.

“I don’t want to say that the market is broken, but the process of how we’re doing these deals is definitely broken,” Cramer said on “Squawk Box.”

While big market debuts are great for shareholders, they’re not so great for the companies. Case in point, Airbnb, which could have raised over double the money on its IPO, priced shares at $68 each for a $3.5 billion haul. For DoorDash, pricing its IPO at $102 per share raised $3.37 billion. Had the company priced the shares where they closed on their first day, that raise could have been more than $6 billion.

The Airbnb IPO is a windfall for investors. And this continues a trend of red hot IPOs in 2020. According to the Morning Brew 19 stocks IPO’s have doubled in 2020, while only three did that in 2019.

Fortunately for me and my clients we have been aggressively playing this trend. Here are four recent IPOs that have jumped big in the last 12 weeks.

  • Palantir (PLTR) +186%
  • Unity Software (U) +75%
  • Corsair Gaming (CRSR) +65%
  • Snowflake (SNOW) +41%
  • Lemonade (LMND) +85%

 

Here is the Plan for Airbnb

I like Airbnb as a company and I like the stock. Shares are looking over bought in the short run with this big jump. But in the long run, I expect shares to do very well, driven by strong revenue growth and a turn into profitability.

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