Why Airbnb Stock Isn't Going Up Right Now

If you look at a chart of Airbnb stock over the last couple of months, it appears that the stock has not done very much. It's trading right around where it was in mid-January

At first glance, that makes no sense at all. We are on the verge of what is expected to be an explosion in travel as more people get vaccinated and feel comfortable traveling once again. You'd expect shares of a premier travel company like Airbnb Inc. (NASDAQ: ABNB) would be surging right now.

Other travel-related companies like Trip Advisor Inc. (NASDAQ: TRIP) and Expedia Group Inc. (NASDAQ: EXPE) have exploded higher in anticipation of all the travel dollars that will come gushing in as America reopens. Trip Advisor is up 67% on the year.

Why hasn't Airbnb stock exploded as well?

What's Going on with Airbnb Stock

The short answer: Shares of Airbnb already exploded.

Those fortunate few who got IPO shares have made 156% on their initial investment already. The stock doubled on the first day of trading.

We saw some more gains when Airbnb released its first earnings report with better-than-expected results in February. Since then, the stock has been somewhat range-bound.

There is a significant chance that the travel surge is already priced into shares of Airbnb.

Airbnb has the early mover advantage on alternative travel accommodations. It has spent over a decade doing all the blocking and tackling to put together a network of hosts worldwide that none of its competitors can match.

From one apartment in San Francisco back in 2007, Airbnb has grown into a global network of over 4 million hosts worldwide. Its network of hosts can offer rentals in 220 countries and 100,000 cities.

No competing alternative accommodations company can even come close.

As long as Airbnb recognizes the importance of growing that hosting network, it will dominate this travel market segment for a very long time.

The question is, what is that worth?

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Disclaimer: Any performance results described herein are not based on actual trading of securities but are instead based on a hypothetical trading account which entered and exited the suggested ...

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