How To Buy Airbnb (ABNB) Stocks & Shares

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Airbnb, Inc.  – as in ‘Air Bed and Breakfast’ – is a US-based company that allows property owners to rent out their rooms and properties to travellers looking for a place to stay.

Travellers can rent out accommodation for several people to share, a shared property with private rooms, or an entire property for themselves and fellow guests.

The company was created in 2007 when two hosts welcomed three guests to their San Francisco home. Since then, four million hosts have accommodated more than one billion guest arrivals in almost every country around the world.

According to the company, there are currently six million active listings worldwide and 100,000 cities and towns with active Airbnb listings.

Since the company went public at the end of 2020, supply of available and desirable locations has been highlighted as the biggest potential hurdle to Airbnb’s hopes of a large surge in tourism thanks to pent-up demand as the coronavirus pandemic retreats.

The company’s share price has dropped around 40% this year amid a broader sell-off in tech stocks, prompted by strengthening inflationary headwinds, interest rate rises and the war in Ukraine. Airbnb shares currently (21 June) trade at around £85 ($102).

However, Airbnb recently told investors it was on track to record a bumper peak summer 2022 season, with around a third more nights booked (according to data from April this year) compared with the same time in 2019.

The company also projected that revenues would increase in quarter two of this year by 50%, compared with the same period in 2021, while acknowledging that bookings remained depressed in the Asia Pacific region.

Airbnb’s current market cap is around £52 billion ($63 billion). Here’s what you need to know about buying – and selling – Airbnb shares.

Note: investing in shares comes with no guarantees. When buying company shares, it’s possible to lose some, or even all, of your money.

That said, over the long term – a minimum of five years (preferably longer) – it’s possible for share-based investments to produce superior returns to those available from low interest-paying deposit accounts, once inflation has been factored in.

Why own stocks?

It’s worth asking yourself why you want to buy shares. Are you looking for capital growth, income from dividends or a combination of both? Your investment objectives will determine what type of shares you invest in, whether high-growth technology shares or more defensive companies with a reliable dividend stream.

Most investors look for sound fundamentals, including a track record of consistent earnings growth, a strong market position or products and services with future growth potential. These should provide a solid platform for future share price growth.

That said, other factors such as takeover rumours can drive up a company’s share price. Investors may also be attracted by recovery plays, with a depressed share price providing the potential for a rebound.

How to buy stock

Once you’ve decided which company to invest in, there are several steps to buying shares.

1) Open an account

Whether you’re a seasoned trader, or new to stock market-based investments, you’ll need to open an account with a regulated brokerage to buy shares in PayPal.

Stockbroking is a competitive market place and services for DIY investors come in a range of guises – from online investing platforms run by some of the biggest names in financial services, to investment trading apps that work off your smartphone or tablet.

Before opening an account, bear in mind the following:

  • Keep your ultimate financial goals in mind
  • Am I comfortable with the level of risk in question?
  • What’s my investing budget?
  • Can I afford to lose money?
  • Do I understand the company in which I’m looking to invest?
  • Am I protected if my platform provider/adviser goes out of business?

2) Where is Airbnb traded?

The ticker symbol for Airbnb is ABNB. It’s listed on the NASDAQ which is open for trading from 9.30am till 4pm (ET). You should be able to buy Airbnb through the vast majority, if not all, brokerage accounts.

Buying shares in US dollars incurs a foreign exchange fee (typically around 1%) unless you fund the purchase from a US dollar account.

Most brokerages also charge a slightly higher transaction fee for buying US, rather than UK, shares although it’s worth comparing the fees charged by different brokers if you plan to trade US shares regularly.

You will be required to complete a W-8BEN form (valid for three years) which allows you to benefit from a reduction in withholding tax for qualifying US dividends and interest from 30% to 15%.

Holding US shares also carries exposure to foreign exchange risk. If the pound strengthens against the dollar, your shares will be worth less in sterling (and vice versa).

As with UK shares, any profit on US shares will be subject to Capital Gains Tax,  unless they are held in an Individual Savings Account (ISA) or self-invested personal pension.

3) Do your research

To find out more about Airbnb lnc., visit the company’s online investor relations page.

It’s also worth comparing Airbnb’s valuation to other comparable technology companies. One way of doing this is to look at their relative price-earnings ratios (or P/Es) – shares trading on a high P/E have high expectations of substantial future growth. Airbnb currently trades on a P/E of 85, which is relatively high for the sector, where P/Es can typically be around 60.

Another useful research tool is brokers’ 12-month share price forecasts, which can be found on financial websites.

4) What’s your investing strategy?

People tend to invest in one of two ways: either with a lump sum purchase, or via smaller, steadier amounts over time.

The latter method benefits from a process known as ‘pound cost averaging’, a stock market technique which helps you pay less per share on average over time in falling stock markets. Rather than waiting to build up a lump sum, it also means an investor’s money can be put to use in the market straightaway.

Note that drip-feeding an investment may sacrifice capital growth if the share price is rising and you will also pay more in share-trading fees.

5) Place an order

Once you’re ready to buy Airbnb shares, log in to your investing account or trading app. Type in the ABNB ticker along with the number of shares you want to buy or the amount of money you’re looking to invest.

Many brokers allow you to add a ‘stop loss’ once you have bought the shares, which allows you to limit your losses should a share price fall.

6) Review Airbnb’s performance

Whether your share portfolio is crammed full of companies or holds only a handful of stocks, it’s vital that you review how each component is performing on a regular basis: monthly, quarterly, or annually.

Doing this gives you the opportunity to review performance and consider whether any adjustments to your holdings are required – to maintain the status quo, buy more stock, or sell existing shares.

How to sell stock

At some point, you will want to sell your holdings. To do this, log in to your investing platform, type in the ABNB ticker and select the number of shares you want to sell.

Note that if you’ve made a substantial profit, you may be liable for CGT. The CGT tax-free allowance for the tax year 2022-23 is £12,300.

How to invest in Airbnb via a fund

Investing directly in individual stocks can be an absorbing and, hopefully, profitable experience. It may also qualify you for shareholder perks specific to the company in question.

Investing directly in companies can, however, leave you vulnerable to stock market volatility and unforeseen swings in share prices.

That’s why financial experts recommend that most people invest in a diversified mix of asset classes and funds that hold a ready-made portfolio of upwards of 50 different company shares.

Being a large global corporation as well as being a major component of the US stock market, Airbnb is found in many global, US equity and index tracker funds.

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