Airbnb Tracking Toward IPO Even After a Reported $13 Billion Valuation Drop

It’s been a challenging 2020 for Airbnb, which laid off 25 percent of its workforce in May and reportedly saw its valuation drop from $31 billion in 2017 to $18 billion this year. Nevertheless, the vacation rental company is preparing for an IPO, leading many would-be investors to ask how to buy into the Airbnb stock IPO.

No date for the Airbnb stock IPO has been announced, but the company announced in mid-August that it had filed a draft registration statement for an IPO with the SEC, and the IPO is expected to happen later this year.

“It was hard to imagine in mid-March and April that Airbnb would be going public this year,” D.A. Davidson analyst Tom White told MarketWatch. But the coronavirus pandemic changed the hospitality landscape. “People have been cooped up, and the virus-safe option is renting a house,” White added.

Pre-IPO investments are “usually reserved for nimble investors and the wealthy,” according to Warrior Trading, which recommends waiting for the IPO and purchasing stock through an online brokerage account. “This account can be opened before the IPO, and a deposit made in preparation for Airbnb stock to go public.” As soon as Airbnb goes public, you can buy shares in the company through trading platforms such as Robinhood, Vanguard, Interactive Brokers, Webull, and Tastyworks.

Robinhood says you can usually place limit orders to purchase shares of IPOs around 8:00 a.m. ET on their opening day. The beauty of limit orders is that your order won’t execute if the selling price is above your limit price, meaning you won’t pay more than the limit you specify. It’s possible that Robinhood will also allow pre-IPO orders of Airbnb stock. The company says it offers pre-IPO orders for a “small selection of stocks” but not every company that lists on the market.

Any IPO investment carries risk, but Airbnb’s IPO might be particularly dicey. In addition to a reported valuation drop, Airbnb had to fundraise $2 billion in debt and equity securities with “onerous terms” this April, Fast Company reports. The magazine also raises questions about Airbnb’s future. Will travel behavior return to normal, and will consumers travel as they did before COVID-19? Will Airbnb overcome its recent safety issues? And will it face additional tax and regulations in major markets?

“Pre-pandemic, many investors would have jumped at the opportunity to claim a slice of the Airbnb pie,” Finder observes. “But it’s impossible to predict whether the platform’s popularity will be enough to help it overcome doubt cast by recent financial decisions. If you’re considering investing, it’s worth more research into the company’s financials before deciding if it’s worth the risk.”