I will be continuing my fall semester blog topic of the companies that help drive the stock market on a day to day basis. For the first blog post, I will be covering a company that is widely known in American society. Airbnb is a company that was created in 2008 based off the idea of community sharing. Airbnb is divided into two main categories. The first of which is used for homeowners who want to rent out their property to others for profit. Airbnb allows a property owner to list their space up for a certain amount of time such as a weekend. The other main portion of Airbnb is the consumer side. Groups of people can rent out others properties through the Airbnb site.
Airbnb recently had its Initial Public Offering (IPO) on December 10th, 2020. An IPO is the process of a company transitioning from a private company to a public company in which the general public can now buy shares of the company via the stock market. Airbnb’s IPO was particularly intriguing because it was one of the most highly sought IPOs in recent history. To put this in perspective, Airbnb was originally estimated to open at $68 a share the night before the IPO. Overnight, the value of the company skyrocketed over 100% which caused the stock to be valued at $146 by the time of the open. Throughout the stocks first day of trading, the stock bounced up and down and ultimately closed right around the value at which it opened at $144.
Since the wildly successful IPO, Airbnb’s stock has been considerably volatile. Immediately after the first trading day, Airbnb’s stock saw a slight dip in its price going from $144 on December 10th, to about $125 on December 15th. This is likely due to investors becoming wary that the stock was too overvalued after its IPO. Worries regarding this soon cooled off as the stock has steadily risen since then. Airbnb’s stock has now risen to where it stands today (January 24th) at $181, a rise of over 50%.
Airbnb has a bright future beyond its IPO and recent stock performance. The company has already carved out a large sector of the travel market for groups of people that do not want to spend the money on a hotel or those who may only be traveling for a night or weekend. As the COVID-19 pandemic restrictions and cases start to lessen, the travel market will likely grow back to pre-COVID levels and will help Airbnb’s cause to be a strong stock and company going into the future.
As a person who has never been particularly up-to-date on the stock market (aside from watching the Big Short), I just want to say that your knowledge and grasp of the market is extremely impressive. That being said, I was intrigued to find out that Air BnB is your choice for an important element of the stock market. But when you mentioned the pure popularity and growth of the company, it made a lot of sense. If you look even at Air BnB’s old website vs. the website it currently has, that transition alone shows just how much the company has grown since it started. I also just wanted to comment and say that you did a really good job of explaining terms relating to the stock market in a way for anybody to understand!