investing

Investors Have Lost Faith in Airbnb's Model, Trader Says With Stock Down Nearly 40% From Highs

John MacDougall | AFP | Getty Images

Move in or check out?

Shares of Airbnb are down 36% from their February highs following the vacation rental company's earnings announcement after Thursday's closing bell. Airbnb's revenue grew 5% in the first quarter, the company said in its second report since going public in December.

With the shares falling more than 3% to close at $135.75 on Thursday, there's limited hope for a rebound, TradingAnalysis.com founder Todd Gordon told CNBC.

"If we make new lows, it's never good," Gordon said in a Thursday interview with CNBC's "Trading Nation" after Airbnb broke below the $138 support level he was watching.

Still, with 20% share of the U.S. lodging market, Airbnb is "bigger than the top five hotel brands combined" and thus positioned well to capitalize on pent-up travel demand, Gordon said.

"Once this housing market loosens back up, pent-up demand eases, supply chain issues calm, more rooms will become available," he said.

Airbnb's gross bookings declined by roughly a third in 2020. In its latest reuslts, the short-term lodging service reported a 39% quarterly increase and 13% year-over-year boost in nights and experiences booked.

"I think those problems are transitory and I think people will reemerge in this market," Gordon said. "I'm bullish. I'd like to see technical support, a little evidence of a reversal, before getting in, but I wouldn't give up on this yet."

Another trader wasn't so sure.

"Competition is really becoming a problem for Airbnb," Boris Schlossberg, managing director of FX strategy at BK Asset Management, said in the same "Trading Nation" interview.

"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 propert[ies], which is where most people want to go," he said.

Airbnb's fees are also starting to deter consumers and lead them to alternative offerings, Schlossberg said.

"I think what's happening with Airbnb, the swan dive in the price, is that it's lost the imagination of Wall Street," he said. "Wall Street has kind of lost faith in its model at this point and I think it's going to be very tough going for the company going forward."

Disclaimer

Copyright CNBCs - CNBC
Contact Us