Individual investors are still unable to buy Airbnb stock because the company remains private, with no plans to go public in the immediate future. It is thought that it will be 2017 at the earliest and perhaps even 2018 before Airbnb decides to have its IPO. Currently the company is valued in the $30 billion range after its most recent fundraising effort raised $850 million. That money will help it avoid having to IPO as it now has plenty of cash to continue to operate and expand on its own.
Why Doesn’t Airbnb Have An IPO Sooner?
There are many reasons why companies have IPO’s but the main one is to gain access to more money (capital) so that they can grow and properly build out their businesses. Without the influx of capital that an IPO gives them, many company just can’t grow and survive. Another less important reason is to monetarily reward all the early investors and employees. IPO’s are the big payday that can result from all the risk (time and money) that those initial investors put into the business.
But a problem with going public is that a company then faces tremendous pressure and scrutiny from stockholders and Wall Street to perform optimally at every juncture. This desire to be free of that Wall Street pressure is why some companies avoid IPO’s for as long as possible, if they have enough cash on hand to survive on their own. It appears Airbnb is in that exact situation, choosing instead to privately raise ample funding and operate exactly as it sees fit for the foreseeable future.
To Buy Stock You Need An Online Discount Broker Account
The one thing any investor needs if they want to buy stocks is an online discount broker account. If Airbnb does go public in 2017 or later, anyone with money in such an account will be able to buy Airbnb stock. The choices available when researching online brokers boils down to about 15 of them that have reliable track records. You can find Barron’s latest 2016 rankings here to get the names of some that you might want to research.
All these brokers charge fees of between $4.95 and $10 per trade and more or less all of them offer the same basic services. It should take you about 15 minutes to sign up with any of them and you will need a Social Security Number as they are required to report your gains and losses to the IRS. After opening an account, your next step will be to fund the account which means to put money in it. This can be done in a variety of ways that will be outlined on each website.
After successfully funding your account, you will be able to buy any stock that is listed on an American exchange but not ones that are on foreign exchanges. Airbnb stock will most certainly be listed on an American exchange and be available for purchase the first day it starts trading.
Hurdles For Airbnb’s Business And Its IPO
Airbnb’s IPO, no matter when the company ultimately decides to have it, will most likely be very popular. As of mid 2016, investors are unable to buy stock in any such company that operates a “sharing” type business. Uber, Lyft, Didi Chuxing, WeWork, and others that have similar business models all remain private. Add to that the fact that there is currently no other company that rivals Airbnb it in a meaningful way and you have the makings of a very hyped IPO, when it finally does happen.
However, there are significant hurdles that the company must overcome before it can IPO and become a good buy for stock investors. Airbnb continues to face legal challenges from a variety of local governments, city regulators, and government legislators around the world. Whenever a company like Airbnb significantly challenges an existing industry (in this case the hotel industry), there is bound to be a lot of push back. It is likely that Airbnb will face many more of these legal battles in the future months and years, the outcome of which is unknown.
Additionally, different countries and cities within those countries may have different rules and regulations that will impact the Airbnb’s ability to do business. Again, this is a brand new take on an old and established industry and how Airbnb will negotiate all the potholes will help determine its IPO timeline. Anyone wishing to buy Airbnb stock will have to be patient until they can do so and even then, determine whether they think Airbnb’s business model is one that will be profitable and able to stand the test of time.