airbnb stock split before ipo
Source: Airbnb

What Does Airbnb's Stock Split Mean for Investors?

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Oct. 27 2020, Updated 10:02 a.m. ET

As the Airbnb IPO gets closer, the company’s board moved to approve a stock split. The vacation home rental provider is preparing to join the 2020 tech IPO party, which has already launched the likes of Snowflake and GoodRx to the public market. What is a stock split and how will it impact investors looking to buy Airbnb shares?

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Airbnb stock IPO news

Airbnb has implemented a 2-for-1 stock split. The stock split follows a more than a 10 percent jump in the value of Airbnb shares from $63 as of June 30 to $70 as of Sept. 30. The split has lowered the value of Airbnb's stock price to $35 per share.

airbnb announces stock split
Source: Airbnb
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What is a stock split?

A stock split occurs when a company divides its shares into smaller pieces. A stock split will increase the number of a company’s outstanding shares without impacting its market value. If a company has a current stock price of $200 and decides to implement a 2-for-1 stock split, an investor that held one share previously would now have two shares valued at $100 each. 

Companies implement stock splits for a variety of reasons including to make their shares more affordable to investors with little money and to increase the stock’s liquidity. Apple and Tesla are some of the notable companies that have implemented stock splits in 2020. Apple implemented a 4-for-1 stock split, which helped lower the price of a single Apple stock to $125 from $500 previously. Tesla implemented a 5-for-1 stock split, which helped lower the price of its stock to $400 per share from $2,000 previously. 

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When is the Airbnb IPO date?

Airbnb made a confidential filing with the SEC in August to publicly list its stock. When is the Airbnb IPO date? While the stock split has taken effect in a step that would make it more accessible to investors, Airbnb hasn’t announced when its IPO will take place. However, the company aims to go public after the U.S. presidential election in November. Airbnb’s IPO date may come in December.

How to buy Airbnb shares

Currently, Airbnb stock trades on the private market. Access to the stock is restricted to a special type of investors based on their investing experience and net worth. If you want to buy Airbnb stock before it goes public, you have to be considered an accredited investor.

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After the Airbnb IPO, all of the interested investors will have a chance to buy the stock. You will be able to purchase Airbnb’s publicly traded stock through brokers like Robinhood, Charles Schwab, Webull, Fidelity, SoFi Invest, and Tastyworks. Robinhood has a feature that allows investors to place advance orders for pre-IPO stocks, which may be ideal for investors looking to buy Airbnb shares immediately when they go public.

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