Airbnb, Inc. is a multinational American company headquartered in San Francisco. It runs an online marketplace for both short- and long-term homestays and experiences.
Acting as a broker, Airbnb charges a commission for each booking. The company was established in 2008 by Brian Chesky, Nathan Blecharczyk, and Joe Gebbia, with the original name being AirBedandBreakfast.com.
Airbnb is widely recognized as a leading platform for short-term housing rentals, boasting over 4 million hosts globally and more than 6 million active listings.
If you’re considering investing in Airbnb, there are two primary approaches: you can either purchase the stock directly or invest in ETFs. This guide will provide you with all the information you need to get started.
How to Buy Airbnb (ABNB) Stock
Step 1: Open a Brokerage Account
Before you can invest in Airbnb stock, you need to open a brokerage account. If you don’t already have one, you can check out our curated list of the best online brokers to help you start your search.
Many brokers now offer fee-free stock trading, but you still need to review any hidden fees and account minimums.
When opening an investment account, you’ll typically have the option to choose between different account types. Two common choices are Individual Retirement Accounts (IRAs) and taxable investment accounts.
- IRAs: IRAs offer tax benefits when you invest for retirement. You can choose between traditional IRAs, Roth IRAs, or SEP IRAs based on your financial situation and goals. If you’ve held your Roth IRA for at least five years, you can withdraw money without paying taxes or penalties. Unlike a Traditional IRA, a Roth IRA doesn’t have mandatory minimum withdrawals.
- Taxable Accounts: Taxable accounts lack the tax advantages of IRAs but offer more flexibility. You can deposit as much money as you want and withdraw your profits at any time, with no tax or penalty from a brokerage account. Moreover, you can potentially deduct some losses from your taxes through tax-loss harvesting.
Step 2: Research Airbnb’s Fundamentals
Before investing in Airbnb or any stock, you need to perform due diligence. Here’s what you should do:
Review Financial Records: Publicly traded companies like Airbnb are required to file financial statements with the U.S. Securities and Exchange Commission (SEC) quarterly and annually. You can access Airbnb’s annual reports and quarterly filings on its investor relations page or through the SEC’s database.
Seek Expert Analyses: Complement your research by reading expert analyses available through your brokerage or from third-party providers like Morningstar. These analyses can provide valuable insights into the company’s financial health and potential for growth.
Step 3: Decide How Much to Invest
To figure out how much you can invest in Airbnb, consider the following factors:
Budget: Assess your monthly financial situation and make sure you have enough to cover expenses, contribute to retirement savings, and build an emergency fund. Whatever remains can be allocated to investments, including Airbnb stock.
Stock Price: Keep an eye on Airbnb’s current stock price. Over the past year, shares have frequently exceeded $100 each. If your brokerage doesn’t offer fractional share trading, accumulating a significant number of shares may be costly.
Investment Strategy: Decide on your investment strategy. Most investors fall into one of two categories: buying a large position all at once or gradually accumulating shares over time, known as dollar-cost averaging. The latter approach can help you spread your investment and potentially reduce the per-share cost over time.
Remember that Airbnb should not be your only stock holding. Airbnb is considered a growth stock and isn’t consistently profitable yet. Financial experts often recommend including it as part of a well-rounded stock portfolio for risk-tolerant investors who have a long investment horizon.
Step 4: Place an Order
Once you’ve done your research and are ready to invest in Airbnb stock, follow these steps:
Access Your Brokerage Account: Log into your brokerage account or investment app.
Enter Ticker Symbol: Find Airbnb’s ticker symbol, which is “ABNB,” and enter it into the order form.
Specify Number of Shares or Dollar Amount: Decide whether you want to buy a specific number of shares or invest a particular dollar amount in Airbnb stock.
Choose Order Type: You typically have two order types to choose from:
Market Order: With a market order, you purchase Airbnb shares at the current market price. This is the default option for most investors.
Limit Order: A limit order allows you to set a price threshold. If Airbnb’s stock price reaches or falls below that threshold, your order will be executed. This can be useful if you want to buy at a specific price point or are concerned about price volatility.
Keep in mind that Airbnb is traded on the Nasdaq stock exchange, and orders are typically fulfilled during normal business hours (9:30 a.m. to 4:00 p.m. ET, Monday through Friday). Some brokerages offer pre-market and after-market extended trading hours.
Step 5: Monitor Your Account
Investing in individual stocks, including Airbnb, requires active monitoring. Here’s what you should do:
Track Performance: Regularly check how Airbnb’s stock price changes over time compared to major benchmarks like the Nasdaq 100 or S&P 500. Moreover, monitor its performance in comparison to other stocks in the same industry.
Stay Informed: Keep up to date with Airbnb’s financial situation by following its public filings and industry reports, just as you did before buying shares.
How to Sell Airbnb Stock
When the time comes to sell your Airbnb shares, follow these steps:
Log into Your Investment Account: Access your brokerage account.
Enter Ticker Symbol and Quantity: Enter Airbnb’s ticker symbol (ABNB) and specify the quantity of shares you want to sell.
If you’re selling your shares at a profit, be aware of potential capital gains taxes. Depending on your income and the length of time you held the stock, these taxes can vary. You can consult a tax professional to determine the best approach for managing your income.
Other Investment Options
While investing in Airbnb stock can be appealing, it’s crucial to understand that individual stock investments can be risky and volatile. Here are alternative ways to invest in Airbnb:
Exchange-Traded Funds (ETFs): ETFs are investment funds that hold a diversified portfolio of assets, including stocks. Around 100 ETFs hold Airbnb shares, including Global X PropTech ETF (PTEC), First Trust US Equity Opportunities UCITS ETF (FTG2), and Invesco Dynamic Leisure & Entertainment ETF (PEJ), etc.
Nasdaq 100 Funds: With Airbnb’s inclusion in the Nasdaq 100 index, you can invest in the company indirectly by purchasing shares of Nasdaq 100 funds. These funds aim to track the performance of the Nasdaq 100, which includes Airbnb and other leading companies.
Learn more: Best Investment Options
