$ABNB Doomed: Stock to $50 (-50%)

7 ago

ABNB Doomed: Stock to $50 (-50%)

Occasionally in your career, you get a really clear signal. The technicals, fundamentals, and narrative all line up perfectly.

I dislike this company, its business model, and the fact that it enables even more Boomers and private money to take family homes off the market. The hosts are adversarial, controlling, and almost certainly spying on you.

Airbnb can only thrive under the halcyon conditions of low interest rates, easy money, and consumers with disposable income. None of this is true, or likely to be true in the coming 24 months.

Americans are declaring bankruptcy at record levels, real wages haven't been lower in a lifetime, and inflation has reduced vacations and luxuries to a trip to McDonald’s. Not joking—a recent headline declared that nearly 80% of Americans consider McDonald's a luxury.

Many hosts are overburdened and overleveraged with mostly vacant properties. Unsurprisingly, hosts' profitability is sinking, and as soon as we see home prices or consumer sentiment start to shake, many of these owners are going to sell. This will fuel a spiraling doom-loop, driving the stock down to as low as $50 by next summer.

The trade: Rejection at the lower highs of '22 and '24 (in yellow) has set up the rising wedge we just broke down from. In the same way rejection at $200 in '22 saw a -60% move, I believe rejection at $170 this year has set us up for another leg down in a precipitous drop.

Short from $125 to about $65. If you're not already bearish and short, look out for a bounce and gap fill to 120ish, before brutal rejection below $100. Get some popcorn; it’s going to be wild.