Red alert as Airbnb stock price forms a death cross, insiders dump

November 13, 2023 02:00 AM PST | By Invezz
Follow us on Google News:

Airbnb (NASDAQ: ABNB) stock price has come under intense pressure in the past few months as concerns about the company’s growth continue. The shares have retreated to about 24% below the highest point this year. 

Airbnb stock has risen by 8.5% in the past nine months, underperforming other comparable companies like Marriott, Booking Holdings, Hilton, and TripAdvisor.

Insiders are selling shares

Airbnb’s business has done well this year as the global economy continues to reopen. This strength is evidenced by the company’s recent results, which revealed that its revenue grew by 17.7% in the third quarter to $3.4 billion. 

Airbnb has also become a highly profitable company. Its net income jumped to $4.4 billion in the third quarter, helped by a one-time income tax allowance of $2.8 billion. Its free cash flow rose to a record high of $4.2 billion.

The company is also benefiting from its international markets. Key countries like Germany, Brazil, and Korea are seeing robust growth. Other countries like China and India are also doing modestly well.

Still, Airbnb faces numerous challenges going ahead. First, the company is facing numerous competition from other companies in the sector. The biggest competitor is VRBO, which is owned by Expedia.

Listing companies like Expedia, Priceline, Booking, and TripAdvisor are also listing vacation rentals in their platforms. Further, hotel companies like Hilton and Marriott have launched their extended stay solutions.

Airbnb has also come under scrutiny because of its substantial additional costs that it charges its customers. As a result, many people have started finding hotels being cheaper than its offerings. In the past earnings release, Brian Chesky, the CEO said:

“In mid-September, we shared progress we’ve made to help lower cleaning fees, reduce prices and improved search and reliability.”

Still, Airbnb has a strong market share in an industry that it developed. This makes its fundamentals quite strong.

A key concern among investors is that Airbnb insiders have been dumping the stock for a while. According to Barchart, insiders have sold over 1 million shares in the past 3 months. In the past 12 months, they have sold over 10 million shares worth over $1 billion. These insiders include Brian Chesky, Dave Stephenson, and Aristotle Balogh.

In most cases, insiders dumping stock is one of the top red flag to consider when investing in a company since they have a clear picture of what is happening. Also, no insider has bought the stock recently.

Still, insider sales are not always a red flag since they sell for numerous reasons, including portfolio diversification. In Airbnb’s case, insiders still holds about 30% of the total float, which is a higher number than other tech companies. 

Airbnb stock price forecast

Airbnb stock

ABNB chart by TradingView

Turning to the daily chart, we see that the ABNB share price is not doing well. It formed a double-top pattern at $150. In price action analysis, this pattern tends to be the most accurate bearish signs. It has now moved below and retested the neckline level at $123.72, the lowest point on August 18th.

The stock is also about to form a death cross pattern, which forms when the 50-day and 200-day Exponential Moving Averages (EMA) crossover. Therefore, the outlook for the shares is bearish, with the next point to watch being at $100.

The post Red alert as Airbnb stock price forms a death cross, insiders dump appeared first on Invezz


The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media LLC (Kalkine Media, we or us) and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary. Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures/music displayed/used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source (public domain/CC0 status) to where it was found and indicated it, as necessary.

Top Listed Companies