Could the ownership structure of Airbnb, Inc. (NASDAQ:ABNB) tell us anything useful?
If you want to know who actually controls Airbnb, Inc. (NASDAQ: ABNB), you’ll need to look at the composition of its share register. Generally speaking, as a company grows, institutions increase their ownership. Conversely, insiders often decrease their ownership over time. Warren Buffett said he likes “a business with enduring competitive advantages that is led by capable, owner-oriented people.” So it’s nice to see some insider ownership, as it may suggest management is owner-driven.
Airbnb has a market cap of US$99 billion, so it’s too big to fly under the radar. We expect institutions and retail investors to own part of the business. In the graph below, we can see that the institutions are visible on the share register. We can zoom in on the different owner groups, to learn more about Airbnb.
What does institutional ownership tell us about Airbnb?
Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.
We can see that Airbnb has institutional investors; and they own a good part of the shares of the company. This implies that analysts working for these institutions have reviewed the stock and like it. But like everyone else, they can be wrong. When multiple institutions hold a stock, there is always a risk that they are in a “crowded trade”. When such a transaction goes wrong, multiple parties may compete to quickly sell shares. This risk is higher in a company with no history of growth. You can see Airbnb’s revenue and historical revenue below, but keep in mind there’s always more to tell.
Airbnb is not owned by hedge funds. With an 11% stake, CEO Brian Chesky is the largest shareholder. Meanwhile, the second and third largest shareholders hold 10% and 9.3% of the outstanding shares respectively. Note that two of the top three shareholders are also Top Key Executive and Board Member, respectively, again highlighting the significant participation of company insiders.
We also observed that the top 8 shareholders represent more than half of the share register, with some small shareholders to balance the interests of the larger ones to some extent.
While it makes sense to study data on a company’s institutional ownership, it also makes sense to study analyst sentiment to find out which way the wind is blowing. There are plenty of analysts covering the stock, so it might be interesting to see what they are predicting as well.
Airbnb Insider Ownership
The definition of company insiders can be subjective and varies from jurisdiction to jurisdiction. Our data reflects individual insiders, capturing at least board members. Management is ultimately responsible to the board of directors. However, it is not uncommon for managers to be members of the management board, especially if they are founders or CEOs.
Insider ownership is positive when it signals that executives think like the true owners of the company. However, strong insider ownership can also give immense power to a small group within the company. This can be negative in certain circumstances.
Our most recent data indicates that insiders own a reasonable proportion of Airbnb, Inc.. It has a market capitalization of just US$99 billion, and insiders have stock worth US$31 billion in their own name. It is quite significant. Most would be delighted to see the board investing alongside them. You may want to access this free chart showing recent insider trades.
General public property
The general public, who are usually individual investors, have a 23% stake in Airbnb. Although this group may not necessarily make the decisions, they can certainly have a real influence on the way the business is run.
Private equity ownership
The private equity firms hold a 9.0% stake in Airbnb. This suggests that they can influence key policy decisions. Sometimes we see private capital sticking around for the long haul, but generally they have a shorter investment horizon and, as the name suggests, don’t invest heavily in public companies. After a while, they may look to sell and redeploy capital elsewhere.
It is always useful to think about the different groups that own shares in a company. But to better understand Airbnb, we need to consider many other factors. Example: we have identified 3 warning signs for Airbnb you should be aware.
But finally it’s the future, not the past, which will determine the performance of the owners of this company. Therefore, we think it’s advisable to take a look at this free report showing whether analysts are predicting a brighter future.
NB: The figures in this article are calculated using trailing twelve month data, which refers to the 12 month period ending on the last day of the month in which the financial statements are dated. This may not be consistent with the annual report figures for the full year.
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