1. Airbnb, Inc. (NASDAQ:ABNB)
No of HFs: 68
Total Value of HF Holdings: $1.61 Billion
Topping the list of best new stocks to buy now is Airbnb. ABNB is an online vacation rental marketplace based in San Fransisco, California. The company was founded in 2008 by Brian Chesky, Nathan Blecharczyk, and Joe Gebbia. According to a Pitchbook report, Airbnb, Inc. was one of the most valuable companies that came to the public markets in 2020. Amid the pandemic, ABNB reported only a 22% decline in revenue during the fourth quarter of 2020 compared to the same quarter of 2019. Shares of ABNB rallied 40% over the last 12 months. One of the biggest shareholders having stakes for Airbnb is Jim Davidson, Dave Roux, and Glenn Hutchins’ Silver Lake Partners which had 2.5 million shares of the company, worth $375 million.
Blue Hawk Investment Group mentioned ABNB in its Q4 2020 investor letter:
“We typically avoid new issues, with ABNB being a rare exception. ABNB fits right into our wheelhouse as a leader in a promising industry, with a disruptive business model, unique company culture, massive addressable market, and a name synonymous with a category (“got an Airbnb for the weekend”). Towards the end of the year, the narrative of the hot IPO/SPAC environment we found to be fitting, with exception. We believe grouping ABNB into this category is a mistake. The IPO was botched, but the mistake was the initial offering price being far too low in this case. We believe the reason for this initial mispricing was the proximity of the IPO to the vaccine effectiveness data release. The data turned out to be much better than anticipated, a blue-sky result, causing a drastic change in the outlook for travel and lodging, the industry in which ABNB operates. Bayes Theorem in action, people typically have a bias when incorporating new information, in that they do not adjust their view as quickly as they should, and the vaccine data release required an almost complete reversal of views.
Back to the company, we started buying on day one and continued to build a position into the $120s and $130s. A founder-led firm, we believe the company has an excellent management team, a very attractive growth profile with many levers at their disposal, and embedded optionality due to their attractive position in the travel ecosystem (and minimal reliance on Google). The most underappreciated aspect of the story is the attractiveness of the financial model. Not many IPOs come along that get us excited, but we believe the future is bright for this young company. We will reveal more details about our thesis in future letters.”
You can also take a peek at Billionaire Stan Druckenmiller’s Top 10 Stock Picks and Billionaire Julian Robertson On Interest Rates and His Top Stock Picks For 2021.
