ABNB Stock: What to Know as Airbnb Overtakes 6 Major Hotel Stocks

Airbnb (NASDAQ:ABNB) continued its gains in the stock market today, with shares adding another 6.2% by market close. But without any typical stock-moving news, what is going on with ABNB stock?

Airbnb (ABNB) app on a smartphone screen

Source: BigTunaOnline / Shutterstock.com

Investors likely know that Airbnb was one of the hottest initial public offerings of 2020, debuting at year-end. Shares soared on that first trading day and have continued to sparkle, with year-to-date gains of 22%. Still, what explains the rise in ABNB stock?

The only recent headlines from Airbnb concern recent chaos at the U.S. Capitol. As national security experts warn of the potential violence at the inauguration for President-elect Joe Biden, many in Washington, D.C. are taking action. Airbnb is one such company. In a statement, the short-term rentals platform said it would block and cancel reservations in D.C. For consumers, this means that you cannot make new reservations, and any existing reservations will be voided. However, Airbnb says it is fully refunding customers and will still pay hosts.

Investors should note that this follows federal and local guidance, and also comes after Airbnb banned users associated with the chaos at the Capitol. But what does it really mean for ABNB stock?

At least for right now, it appears the market is rewarding Airbnb. The company wants to avoid controversy and align with safety-oriented recommendations. For many investors, that frames ABNB as a socially responsible and future-thinking investment.

With this all mind, Airbnb saw its market capitalization cross $100 billion this week. Now, it has a higher market cap than Marriott (NASDAQ:MAR), Hilton (NYSE:HLT), InterContinental (NYSE:IHG), Hyatt (NYSE:H), Wyndham (NYSE:WH) and Choice (NYSE:CHH) combined.

What Does This Mean for ABNB Stock?

Beyond a short-term, pre-inauguration rally, what does this mean for ABNB stock? According to InvestorPlace Markets Analyst Tom Yeung, perhaps not much:

“In the grander scheme of things, they’re doing exactly what Facebook and Amazon are: Trying to play nice with an incoming Biden administration. These tech firms are monopolistic and know they need to stay in the DOJ’s good graces. It would be disastrous for ABNB to have its booking and servicing businesses split in two like most OTAs are.” 

Keeping D.C. safe is certainly a good way to play nice with Biden, but as Yeung argues, is not a long-term boost to Airbnb.

In other words, do not rush to buy ABNB stock simply because of this news. Instead, do your own research on the company and determine if you are bullish on what it represents. If you like its travel and experience offerings, then keep it on your watch list.

On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article. 

Sarah Smith is a Web Content Producer with InvestorPlace.com. 

Article printed from InvestorPlace Media, https://investorplace.com/2021/01/abnb-stock-what-to-know-as-airbnb-overtakes-6-major-hotel-stocks/.

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