Airbnb IPO could be the ‘steal of the century’ if people keep switching from hotels to homes, Jim Cramer says

CNBC

  • Airbnb’s upcoming stock-market debut could be a once-in-a-lifetime deal, “Mad Money” host Jim Cramer said on his Monday show.
  • “Thanks to COVID-19, Airbnb is now the safest way to travel, which is why this IPO might end up being the steal of the century,” he said.
  • The home-sharing platform will benefit from people’s fear of staying in hotels, face less resistance from embattled hotel chains, and attract more users as people rent out their homes for extra cash and travelers look for bargains, Cramer argued.
  • “This turns out to be another one of those forever-changed businesses that’s actually benefiting from COVID-19,” he added.
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Airbnb raised some eyebrows when it filed to go public last week, even as the pandemic continues to discourage global travel and depress demand on the home-sharing platform.

However, its stock-market debut could be a rare chance to buy into a world-beater at a discount, “Mad Money” host Jim Cramer said on his Monday show.

“Thanks to COVID-19, Airbnb is now the safest way to travel, which is why this IPO might end up being the steal of the century,” he said.

Read more: UBS analyzed how 900 stocks perform on positive COVID-19 vaccine news days – and concluded that these 17 are poised to jump at least 9% on the next cycle of encouraging headlines

Staying in a stranger’s house previously felt riskier than booking a hotel.

Now, people view hotels as “outright dangerous” in terms of catching the virus, given they have to share facilities such as elevators, pools, gyms, and restaurants with other guests, Cramer said.

Airbnb could also face less resistance from hotels than in the past, as they’re busy chasing government bailouts and trying to stay in business, Cramer continued.

“It pretty much has the market to itself,” he said. “The once-mighty hotel and restaurant industries – and their unions – no longer have the clout to keep Airbnb down.”

The depressed US economy could also help Airbnb, as more people may look to rent their spare rooms and homes for some extra cash, and travelers are hunting for bargains, Cramer said.

“This turns out to be another one of those forever-changed businesses that’s actually benefiting from COVID-19,” he said.

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Cramer’s comments suggest Airbnb’s recent troubles will be temporary.

CEO Brian Chesky warned in May that revenues were on track to tumble more than 50% this year, spurring him to cut costs, raise $2 billion in fresh capital, and lay off 1,900 employees or 25% of Airbnb’s global workforce.

Airbnb’s bookings have rebounded since then, but were still down 30% in June compared to the same month last year, Bloomberg reported. Moreover, revenue slumped 67% year-on-year to $335 million last quarter, resulting in a $400 million loss before interest, tax, depreciation, and amortization, Bloomberg said.

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