On August 19, 2020 Airbnb filed for an initial public offering with US regulators. Airbnb IPO will be held on December 10, 2020
- Below you will find the detailed instructions how to buy Airbnb stock before (pre-IPO, already open for applications) and after the upcoming IPO
What is an IPO and how it works
IPO is a process of offering shares of a private corporation to the public in a new stock issuance. Why go public? The primary benefit of going public is easier access to capital.
To go public, a company must have a track record of growth and other favorable results and hire an investment bank (Morgan Stanley and Goldman Sachs in Airbnb case) to come in and underwrite the IPO. The underwriters also performed due diligence and verified financial information and business model.
Once the paperwork done, the company sells the stock to institutional investors. When the initial block of shares has been sold, the company sets an initial price and date for the stock to begin trading on a stock exchange.
Financial Indicators before Airbnb IPO
Airbnb has raised more than $4.5Bn in capital, its guests have booked more than 1 million nights globally, and booked $4.8bn in revenue in 2019. In 2020, there was about 67% decline in earnings due to COVID-19, but the company weathered this period by getting 1Bn loan and cutting 25% of staff. The company began seeing signs of recovery in June, with bookings down only 30% from the same month in 2019. That compared with a 70% decline in May from a year earlier.
Now Airbnb is growing faster (+32% revenue gain) than competitors Booking Holdings (+3%) and Expedia Group (+7%). Also the personality of the CEO and founder Brian Chesky is the key factor what previous investors like Silver Lake took into account.
By 2030 Airbnb is expecting that more than 400M customers will be using its platform for renting housing and placing their own offerings. "Global Growth" companyʼs report highlights its entry into emerging markets thanks to which the company will continue to grow globally. Entering the markets of China and India will allow the company to gain millions of new customers and increase its earnings.
Airbnb IPO filling document S-1
Previous Airbnb Funding
How to Buy Airbnb Stock Before the IPO (Offering Price)
In the past, IPOs as highly profitable investments were available only to the privileged customers of the leading brokerage firms and it was challenging for retail investors to gain access. You couldn't buy shares paying the price set by the company and you had to wait until the shares actually start trading on the public stock market at whatever stock price supply and demand allows.
Technologies and marketplaces changed the rules of the game, now regular investors can get pre-IPO shares. To participate in Airbnb IPO you need to use an IPO investing app like Freedom Finance (NASDAQ: FRHC) or Webull. They give its customers access to IPOs and secondary offerings through their existing brokerage account.
🚨 Detailed Instruction How to Participate in an Initial Public Offering before public trading:
Below we share the instruction how to participate in the approaching Airbnb IPO using Freedom Finance (Tradernet platform). This marketplace is chosen as an example because Airbnb IPO is already listed there, and you can submit your application now (before Nov 30).
* Freedom Finance services are NOT available to US citizens and residents. If you're a citizen or resident of the US please use Webull to participate in the Airbnb pre-IPO. All US new users will get 4 free stocks worth up to $3700 when they make an initial deposit over $100 via this link. The offer will end on Nov 30.
- Apply for a Freedom Finance account — you need to prepare your identity document and a document confirming the address of residence (utility bill). The verification process is very fast, it will take 2 minutes to create your account.
- Deposit your account — to participate in an IPO, your account must have available funds in the amount you send IPO application for.
- Wait for a request to participate in the IPO — a few days before IPO date you will get a notification (email and SMS text message) from Freedom Finance. You will have about 48 hours to apply for the IPO.
- Submit a request to participate in the IPO — when you get a notification that you can apply to buy shares, go to IPO section of the platform > you will see Airbnb IPO listing with the share price set by the underwriter > click Participate in IPO Airbnb > input the amount you want to invest > Send your application. Note: Before the book closing, a request can be withdrawn. At the time of the book closing, 1 day before the start of the exchange trading, the specified amount will be blocked on the account.
- Wait for allocation — The actual number of stocks purchased during an IPO depends on supply and demand. The higher underwriter reserves the right to partial execution of collective applications. So if the demand is high you may get less than you applied for. Of course, you will only pay for the shares purchased. The rest of the funds will be returned to your account.
- Start of trading — With the beginning of the public trading on the stock exchange, the purchased shares will appear on the account and a lock-up period will start— a 93-day period of prohibition on sale. You can’t sell stocks, but you can track their current value and growth indicators in your personal member area and a trading terminal.
- Closing your trade — At the end of the 93 days lock-up period, you will be able to manage your stocks at your discretion — leave in the portfolio or sell and withdraw money or transfer the stocks to another depository/ broker in your name. This can be done in your account by clicking the ‘Sell’ button next to the name of the security. In this case, a commission of 0.5% of the amount of the sale transaction is charged.
Buy pre-IPO shares from Airbnb directly
Eligible hosts in the U.S. may be able to participate in the IPO on offering price. Pre-registration emails have been already sent out to the eligible hosts to register.
- Will selected hosts get a discount from Airbnb? No, partially because of the regulation.
- What will be the allocation (maximum share number to purchase) and the lockup period (period of prohibition on sale)? Unknown yet, we will get this post updated when Airbnb releases the details.
- What are the benefits of buying stocks from Airbnb? Your only savings from buying directly is the brokers fee, but now many platforms (mentioned above) offer fee-free trading or the commission is very small. Still with a broker/ investing app you will have more flexibility and can get a larger allocation.
Is investing in IPOs profitable?
Not always. You can check the performance of the past 149 IPOs since 2012 here. The average return at the end of the lock-up period is 52%
When is the Airbnb IPO date?
Financial experts expect that Airbnb is expected to make its IPO filing public on December 10, 2020 and the IPO offering will be held on November 30, 2020 , after the market volatility associated with the United States presidential election.
What is the Airbnb ticker (stock symbol)
Airbnb's ticker is ABNB
Airbnb IPO price range
Estimated IPO date is December 10, 2020.
Airbnb IPO currency
$ United States dollar (USD)Fair fees currency conversion
How to Invest in Airbnb After the IPO (Opening Price)
Alternative way to invest in Airbnb is purchasing stock on market price after IPO via a commission-free trading app like eToro or Webull. All US new users will get 4 free stocks worth up to $3700 when they make an initial deposit over $100 via this link. The offer will end on Nov 30.
You just register with a commission-free trading app, and on the first trading day type into the search "Airbnb" > click on the Airbnb listing > input the amount and click Buy to purchase Airbnb shares.
We will announce the first trading date when Airbnb stock is available on the market on Airbnbase blog when the date is set by the underwriters, if you want to get notified please leave your email here.
Airbnb's IPO news and updates
- October 26, 2020 – Airbnb's board has confirmed a 2-for-1 split of privately held shares before the planned IPO, according to an email reviewed by Bloomberg News. The increase in Airbnb’s value coincides with the rebound of Airbnb books over the summer after the spring plunge caused by the coronavirus pandemic.
- October 30, 2020 – Airbnb hosts will not be given cash bonuses to buy shares (partially for regulatory reasons). But instead Airbnb introduced the Airbnb Host Advisory Board and putting aside 9.2 million shares for an "endowment" that's intended to help hosts.
- November 11, 2020 – Airbnb plans to make public the regulatory filing and prospectus or its IPO next week until November 20, 2020.
- November 16, 2020 – Eligible hosts in the U.S. may be able to participate in the IPO on offering price. Pre-registration emails have been already sent out to the eligible hosts to register.
- November 16, 2020 – Freedom Finance confirmed they will start accepting applications for Airbnb IPO on December 10, 2020