Profit Pregame

The Dangers of Investing in The Airbnb IPO (And What You Should Do Instead)

Another IPO to add to the list…

Airbnb has officially gone public.

What’s happening?

2020 has been the year of many things and now, you can add the year for record-breaking IPO’s to the list. We’ve seen a large amount of companies come forward this year with an IPO and most have set the bar high. For instance, on September 16, Snowflake went public at $245 a share, raising an absurd amount of $3.36 billion. Doordash followed shortly after raising $3.37 billion. And that’s just two of the companies that have made the decision to go public in 2020.

So, as you can see – IPO’s have been the name of the game.

But there’s one more company looking to capitalize on the IPO optimism this year has brought forth. And this time, it’s Airbnb Inc. This vacation rental online marketplace company has been a name that has been highly anticipated in the IPO world. And now, they have officially launched this offering.

Here’s what we’re seeing…

Where’s the money?

Airbnb priced its initial public offering more than 50% higher than its original target, valuing the home rental platform at $47 billion. And this wasn’t surprising given the market’s ever growing appetite for new tech names which has sent both DoorDash and Snowflake soaring.

Airbnb offered around 52 million shares for sale at a final price of $68 each, well ahead of their December 1 target of between $44 and $50 and the biggest IPO of the year for a U.S. company. The shares began trading on Tuesday under the ticker ABNB. The group is hoping to raise around $3.4 billion.

It seems like an impressive IPO spread, no doubt. But before you rush to throw your money into the public offering – here’s what you need to know…

How do I get some?

There’s no denying that the Airbnb IPO was highly anticipated. And now the company rests at a $47 billion valuation. But you should never buy into something because of the hype. You see, when you look closer at the IPO wave we’ve seen this year, we continue to see explosive IPO performances by companies that simply don’t make money.

And when I think about it, this current trend reminds me a lot of the 1999 internet bubble. The phenomnon effect caused many to rush into the tech sector without thinking rationally. Many of the companies that were leaders in this rally ended up shutting down while other stocks saw massive declines eventually. And it cost a lot of people a lot of money.

Because here’s the thing – sure, a successful IPO is exciting but at some point valuations and making money should matter. And I think when investors realize that, these big IPO names will run into trouble. With that said, I would be looking to buy put spreads in a company that went public just last year. And that company would be Uber. I think by purchasing put spreads, you’ll be able to profit off another big name in the market without all the fallout that comes with IPO optimisim.

In the Spotlight: Tomorrow is the day – will you be joining me?

Yesterday, I wrote to you about the Santa Claus rally. A powerful market phenomenon that happens yearly, without fail. But In case you missed it, the Santa Claus rally is simple. Since 1969, 34 out of 45 years have seen a late December rally.

And year after year, investors have cashed in on this trend. But when it comes to trading this rally, many still wonder what the best way to secure gains off this December optimism might be. But I’ve spent the last few years really digging into it – and now, I’m ready to reveal my trading plan to ride this bullish trend straight to profits.

Now, when it comes to the Santa Claus rally, many find themselves buying shares of bullish stocks and sitting on them in hopes the “January effect” takes place and runs them up even higher. But if you know anything about me, you’ll know I’m not one to sit around and wait for profits. So, I started testing ways to cash in on this rally in the short term instead of waiting around for the next year to make or break my profits.
Through this process, I’ve realized that the best way to score big on this trend is to invest in short-term options and ride this influx of volume straight to the bank. By playing the trend to the short term, you’ll set yourself up to capitalize off the end of the month optimism without tying yourself down in such an overall, volatile market.
And I’m really just scratching the surface of what’s possible with this powerful trend, but today, I’ll be revealing it all to an exclusive group – live, in real-time. And I’ll also be delivering my number one pick for how you can score big on this pattern.

Now, attendance is limited, and after yesterday, the guest list is nearly full. So, I wanted to extend a final invitation to join me in The 1450 Club and get exclusive access to today’s bonus trading session.

We’ll be going live at 9:30 AM – so there’s only a few hours left to grab your seat!

So, click here to secure your spot on the guest list.

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