Move in or check out?
Shares of Airbnb fell by 36% compared to the February high after the holiday rental company’s profit announcement after the closing bell on Thursday. Airbnb’s sales grew 5% in the first quarter, the company said in its second report since going public in December.
With stocks down more than 3% on Thursday to close at $ 135.75, there is limited hope of a rebound, Todd Gordon, founder of TradingAnalysis.com, told CNBC.
“If we hit new lows, it’s never good,” Gordon said in an interview with CNBC on Thursday “Trading nation” After Airbnb dropped below the $ 138 support level, he observed.
With a 20% share of the US accommodation market, Airbnb is “bigger than the top five hotel brands combined,” well positioned to capitalize on the pent-up demand for travel, Gordon said.
“As soon as this real estate market eases again, the pent-up demand subsides, the problems in the supply chain calm down and more space becomes available,” he said.
Airbnb’s gross bookings were down around a third in 2020. In the most recent new releases, Short Term Accommodation Service saw a 39% quarterly increase and a 13% year-over-year increase in nights and experiences booked.
“I think these issues are temporary and I think people will re-emerge in this market,” said Gordon. “I’m bullish. I would like to see tech support, a little bit of evidence of a reversal, before I get in, but I wouldn’t give up on that just yet.”
Another dealer wasn’t so sure.
“The competition is really becoming a problem for Airbnb,” said Boris Schlossberg, managing director of FX strategy at BK Asset Management, in the same interview with “Trading Nation”.
“VRBO is really giving Airbnb a run for its money, mainly because Airbnb has a much larger inventory in the urban core and VRBO is much, much better positioned in the vacation rental[ies]where most people want to go, “he said.
Airbnb’s fees are also starting to discourage consumers and leading them to alternative offerings, Schlossberg said.
“I think what happens to Airbnb, the swan jump in price, is that it has lost the Wall Street imagination,” he said. “Wall Street lost faith in its model at this point and I think it will be very difficult for the company in the future.”