Airbnb Co-Founders Rapidly Sell Shares – Insider Weekends

Airbnb (ABNB): $149.62

Market Cap: $95.90 billion

Enterprise Value: $87.24 billion

We always tend to highlight insider purchases in our Insider Weekends articles, as they tend to be a stronger signal. Insiders sell shares more frequently and they sell for a variety of reasons not typically applicable to purchases. However, there are times when an insider selling shares is significant – such as Elon Musk selling shares of Tesla near its all time high in November 2021, which we wrote about in an article titled The Pied Piper Is Heading Out of Town.

With the quiet period during earnings season still in full swing, insider purchases are infrequent, and the few that still emerge aren’t quite interesting. So we’ve decided to pivot and take a look at insider selling, which put online rental marketplace Airbnb (ABNB) on our radar.

Airbnb was very much a favorite of the market when it first went public in December 2020, and shares began trading at $144.71, 113% above the initial offering price of $68 per share. The company saw very rapid revenue growth (above 75%) during the pandemic, as people began to go remote and rent out properties for longer stays. When the pandemic ended and employees began to return to work and their permanent homes, the short-term rental space began to suffer, and Airbnb’s growth slowed.

Nevertheless, the company still saw a strong third quarter in 2023 (ended September 30, 2023), with revenue growing by 18% to $3.4 billion when compared to Q3 2023. Nights and Experiences (calculated by adding the total number of nights booked for stays and the total number of seats booked for experiences and subtracting cancellations and alterations) grew by 14% to 13.5 million. The company also saw nearly 1 million new listings added to the platform in the quarter.

However, an interesting dichotomy arises when realizing that since the company went public, not a single insider has purchased shares. 

The stock price had hit highs of over $200 per share early on, but even when it dipped to around $80 a share in December 2022, insiders continued to sell. As the business began to recover in recent months and the stock climbed its way back to its current trading price at $149.62, the current CEO and Chairman of the company began to sell shares of the company under a 10b5-1 trading plan. 

Brian Chesky co-founded Airbnb with Joseph Gebbia and Nathan Blecharczyk (who currently serves as Chief Strategy Officer of the company), and Mr. Blecharczyk also adopted a similar trading plan at the same time. Joseph Gebbia stepped down from his leadership role in 2022, and now serves as a Director, and has been selling shares since he left his position. The consistent direct sales (unrelated to options) by Mr. Chesky and Mr. Blecharczyk along with many other insiders raises questions.

Perhaps the insiders are slightly ahead of the curve in this case, and they expect the company’s performance and stock price to fall once again.

Jeff Bezos once said, “The thing I have noticed is when the anecdotes and the data disagree, the anecdotes are usually right.”

While booking and revenue have been strong, over the past year, Airbnb has seen tens of thousands of complaints from hosts and guests alike, especially related to rising costs of the platform. While Airbnb was originally meant to offer a cheap alternative to hotels, many hidden host fees and higher host expenses have made it so guests aren’t saving much when booking an Airbnb rental compared to a traditional hotel. The company has also seen struggles in cities such as New York City, which banned any rentals that were shorter than 30 days. This Vox article goes into excellent detail about the many grievances, and how the Airbnb market transformed both during and after the pandemic, at the expense of hosts and guests alike.

Despite growth rates dropping gradually analysts have revised EPS estimates up 29 times in the last 90 days, indicating a lot of confidence in the stock. The fourth quarter could end up being strong and that anticipation has driven the stock price up over the last few weeks including a nearly 7% gain during the last month. When the company reported results last quarter, its forward guidance was weaker than expected and this triggered a sell off in the stock. Given the pace of insider selling, it looks like the upcoming earnings release could trigger a repeat of what happened last quarter. 

Welcome to edition 718 of Insider Weekends. Insider buying almost doubled with insiders purchasing just $30.84 million of stock compared to $17.34 million in the week prior. Selling also increased to $970.74 million compared to $527.49 million in the week prior.

Sell/Buy Ratio: The Insider Sell/Buy ratio is calculated by dividing the total insider sales in a given week by the total insider purchases that week. The adjusted ratio went up to 31.48. In other words, insiders sold more than 31 times as much stock as they purchased. This week, the Sell/Buy ratio was unfavorable, compared to the prior week when the ratio stood at 30.42.

Notable Insider Buys:

1. Perspective Therapeutics Inc (CATX): $0.63

Shares of this biotech company were acquired by 2 insiders:

• Chief Medical Officer Markus Puhlmann acquired 280,000 shares, paying $0.50 per share for a total amount of $139,888. Mr. Puhlmann increased his stake by 25.56% to 1,375,425 shares with this purchase.
• Director Robert F. Williamson acquired 51,996 shares, paying $0.49 per share for a total amount of $25,478. Mr. Williamson increased his stake by 219.58% to 75,676 shares with this purchase.

You can view the list of recent insider transactions for Perspective Therapeutics Inc here.

2. Compass Minerals International Inc (CMP): $23.04

Director Joseph E. Reece acquired 5,000 shares of this essential minerals provider, paying $21.24 per share for a total amount of $106,200. These shares were purchased indirectly through a trust.

You can view the list of recent insider transactions for Compass Minerals International Inc here.

3. Northwest Bancshares Inc (NWBI): $12.97

EVP, Chief Information Officer Scott J. Watson acquired 5,000 shares of this regional bank, paying $12.90 per share for a total amount of $64,511. Mr. Watson increased his stake by 16.51% to 35,282 shares with this purchase.

You can view the list of recent insider transactions for Northwest Bancshares Inc here.

4. NBT Bancorp. Inc. (NBTB): $37

EVP & Chief Financial Officer Scott Allen Kingsley acquired 1,000 shares of this regional bank, paying $36.80 per share for a total amount of $36,800. Mr. Kingsley increased his stake by 4.08% to 25,513 shares with this purchase.

You can view the list of recent insider transactions for NBT Bancorp. Inc. here.

5. Dakota Gold Corp (DC): $2.33

Chief Operating Officer Gerald Michael Aberle acquired 11,263 shares of this gold exploration company, paying $2.16 per share for a total amount of $24,327. Mr. Aberle increased his stake by 0.26% to 4,272,648 shares with this purchase.

You can view the list of recent insider transactions for Dakota Gold Corp here.

You can view the full list of purchases from this Insider Buying page.

Notable Insider Sales:

1. Netflix Inc. (NFLX): $570.42

Shares of Netflix were sold by 3 insiders:

• Chief Legal Officer David A. Hyman sold 47,574 shares for $537.92, generating $25.59 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
• Director Jay C. Hoag sold 47,000 shares for $550.50, generating $25.87 million from the sale. These shares were sold indirectly through a trust.
• Co-CEO Gregory K. Peters sold 13,655 shares for $543.80, generating $7.43 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.

You can view the list of recent insider transactions for Netflix Inc. here.

2. Meta Platforms Inc (META): $394.14

Shares of Meta Platforms were sold by 3 insiders:

• COB and CEO Mark Zuckerberg sold 98,405 shares for $383.70, generating $37.76 million from the sale. These shares were sold indirectly by varius entities.
• Chief Operating Officer Javier Olivan sold 13,500 shares for $390.93, generating $5.28 million from the sale.
• Chief Legal Officer Jennifer Newstead sold 566 shares for $385.00, generating $217,910 from the sale.

You can view the list of recent insider transactions for Meta Platforms Inc – Class A here.

3. Airbnb Inc (ABNB): $149.62

Shares of Airbnb were sold by 2 insiders:

• CEO and Chairman Brian Chesky sold 161,358 shares for $141.57, generating $22.84 million from the sale.
• Chief Strategy Officer Nathan Blecharczyk sold 20,000 shares for $141.01, generating $2.82 million from the sale.

You can view the list of recent insider transactions for Airbnb Inc – Class A here.

4. Atlassian Corporation (TEAM): $247.79

Shares of this software application company were sold by 2 insiders:

• Co-CEO, Co-Founder Michael Cannon-Brookes sold 40,904 shares for $244.82, generating $10.01 million from the sale. These shares were sold indirectly through a trust.
• President Anutthara Bharadwaj sold 2,470 shares for $240.55, generating $594,159 from the sale.

You can view the list of recent insider transactions for Atlassian Corporation – Class A here.

5. Arista Networks Inc (ANET): $264.4

Shares of this networking company were sold by 2 insiders:

• President and CEO Jayshree Ullal sold 73,623 shares for $262.00, generating $19.29 million from the sale. 24,000 of these shares were sold indirectly by a trust.
• Director Yvonne Wassenaar sold 186 shares for $261.41, generating $48,623 from the sale.

You can view the list of recent insider transactions for Arista Networks Inc here.

You can view the full list of sales from this Insider Sales page.

The list of all insider purchases and sales by management people is only available to InsideArbitrage Premium and Plus members.

Disclaimer:  I hold long positions in Netflix and Meta. Please do your own due diligence before buying or selling any securities mentioned in this article. We do not warrant the completeness or accuracy of the content or data provided in this article.