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Airbnb IPO – our view and how to invest

Airbnb shares listed on the US stock market. We share our views on the company and how you can invest.

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

Airbnb shares are now trading on the US stock market, using the symbol ABNB.

View the latest Airbnb share price

Selected highlights from the prospectus:

  • More than 4m hosts on its platform in over 220 countries and regions
  • Year on year bookings down 72% in April and roughly 20% through June – September due to Covid-19
  • Quarter four this year is expected to have lower bookings than the third quarter
  • Airbnb claims that while international bookings have been affected, domestic travel and short distance stays have been resilient
  • Losses of nearly $700m on revenue of $2.5bn in the first 9 months of this year
  • The company spent $5.3bn to create $4.8bn in revenue in 2019
  • Airbnb does not intend to pay a dividend in the forseeable future

Our view on Airbnb

It’s hard to knock what Airbnb’s achieved in a relatively short time. And it’s a great example of how a company worth billions can grow from a simple idea.

It started with Brian Chesky and Joe Gebbia hosting guests in a spare room at their San Francisco home. In 2019, more than 2 million people stayed at an Airbnb hosted property every night, on average. These range from apartments and homes to castles and tree houses.

The key to growth is Airbnb doesn’t have to own the property. It connects renters and property owners across the globe through its online platform. Hosts pay Airbnb a 3% commission, while guests pay a 6-12% service fee.

This business model is proving successful – revenue topped $2.5 billion in the first three quarters in 2019.

But 2020 has been very different.

Coronavirus has hit the travel and hospitality industries hard. Airbnb isn’t an exception. And it’s impossible to predict the impact coronavirus will have on its future.

Airbnb could benefit – with staycations increasing and cash-strapped customers preferring self-catered accommodation to booking a hotel and eating out. Whether that’s enough to offset the decline in international travel is uncertain.

As with everything, investors must look past the hype, fanfare and the history.

It’s important to understand a company before investing. Know the company-specific risks and make sure you’re happy with the long-term prospects.

And never put all your eggs in one basket.

Investing in an individual company is higher-risk and isn’t right for everyone. Your investment is dependent on the fate of that company. If it fails, you risk losing your whole investment. Investors should only buy and hold individual shares as part of a well-balanced, diversified portfolio.

How to buy Airbnb shares

If you’re thinking about buying shares in Airbnb, the good news is that it’s much easier than you might think.

In fact, you could do it all online.

Please remember the value of investments, and any income from them, goes up and down so you could get back less than you originally invest. Past performance is not a guide to the future.

1. Choose an account to hold your shares in

You can hold Airbnb shares in our Fund and Share Account, HL ISA or Self-Invested Personal Pension (SIPP).

CHOOSE AN ACCOUNT THAT'S RIGHT FOR YOU

Before you buy your first US share with HL, you’ll also need to complete a W-8BEN form.

2. Check the latest Airbnb share price

You can view the latest Airbnb share price and charts on our dedicated Airbnb share factsheet.

View the latest Airbnb share price

3. Buying Airbnb shares

When you come to place a trade, we’ll show you the live Airbnb price in both US dollars and sterling. You can then choose to accept the price or not.

That’s it. Your shares will be held in your account. You can see how they’re doing and deal whenever the US market is open, online or with the HL app.

What are the costs?

There are three charges to think about before buying US shares:

Dealing charge: our maximum online dealing charge to buy and sell US shares is £11.95 per trade. You can also deal over the phone or by post from £20 – £50 per deal.

Foreign Exchange (FX) charge: US shares are bought and sold in US dollars. But you don’t need to hold a foreign currency account. We’ll automatically convert the money in your account into US dollars to pay for the shares. Similarly, when you sell, we’ll convert the proceeds back into pounds for you.

The cost will depend on the value of your deal, up to a maximum of 1% per deal. Changes in the exchange rate will affect the sterling value of overseas holdings.

Annual charge: there’s no annual charge to hold US shares in the Fund and Share Account. It costs up to 0.45% per year to hold US shares in an HL ISA or SIPP (capped at £45 per year in the ISA and £200 per year in the SIPP).

View our overseas dealing charges

Our share dealing service is designed for investors who are happy making their own investment decisions. If you’re not sure if an investment is right for you, please seek personal advice.

To make sure you don’t miss out on any future IPOs, sign up for our email alerts.

What did you think of this article?

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

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