I’ll admit, I like Airbnb’s (NASDAQ:ABNB) business model of facilitating short-term room rentals. It’s a brilliant concept, but cautious investors should still wonder whether ABNB stock has gotten ahead of itself in 2023. A share-price pullback is likely. Prospective Airbnb shareholders should watch, wait and be patient.
As we’ll see, Airbnb’s rapid growth as a business caught the eye of some regulators. That’s bad news for Airbnb, and the company will soon have a new and powerful competitor. So, let’s delve into the worrisome details now.
Which Insiders Sold ABNB Stock?
Here’s the lowdown. On Sept. 12, Airbnb co-founder, CEO and Chairman Brian Chesky reportedly sold 150,000 ABNB stock shares. During the past year, Chesky sold a total of 270,000 Airbnb shares and bought no shares of his company.
In addition, Chief Technology Officer Aristotle Balogh reportedly sold 2,750 Airbnb shares. Over the past year, Balogh has bought no Airbnb shares and has sold a total of 149,750 of them.
Maybe they’re engaging in profit taking – and perhaps retail investors ought to do so, as well. After all, ABNB stock Airbnb has zoomed from $85 to nearly $140 this year. As the old saying goes, there are bulls and there are bears, but greedy pigs get slaughtered.
Besides, the Airbnb share price is vulnerable to a sharp pullback for a couple of reasons. I’m not just claiming that it will drop below $100 because it went too high, too fast. After learning about Airbnb’s headwinds, you’ll surely agree that now isn’t the right time to invest in Airbnb.
Two Huge Problems for Airbnb in 2023
First and foremost, regulators in New York City and elsewhere are clamping down on Airbnb’s business. In fact, New York City recently enacted strict rules that only allow Airbnb room rentals under highly specific conditions.
The result has been a sharp decline in Airbnb bookings in New York City. Regulatory restrictions on room rentals are reportedly in place, or could occur soon, in such global locales as Florence, Paris, and Austria.
On top of all that, Airbnb will have to deal with competition from a well-known hotel chain. Reportedly, Hyatt Hotels (NYSE:H) plans to introduce Homes & Hideaways by World of Hyatt, a platform for U.S.-based short-term vacation rentals of homes and remote hideaways.
If Homes & Hideaways by World of Hyatt gains traction among U.S. vacationers, Airbnb could quickly lose some of its market share.
Finally, I should also mention that famous financial author Robert Kiyosaki, who wrote Rich Dad Poor Dad, reportedly declared on social media, “Airbnb to lead real estate market crash.”
Personally, I’m not losing sleep worrying about an imminent U.S. housing market crash. But hey, maybe Kiyosaki knows something I don’t know.
ABNB Stock: Wait for $100 or Less
I don’t recommend obsessing about whether Airbnb will cause a real estate market crash. For prospective investors, it’s a question of whether the Airbnb share price is too high in light of the company’s problems.
Regulatory roadblocks and competition from Hyatt Hotels are likely to cause ongoing trouble for Airbnb and its stakeholders.
Therefore, I’m bracing for ABNB stock to fall below $100 within the coming months. After that, I will reassess the situation and, maybe, consider a share position in Airbnb.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.