What happened
Shares of Airbnb (ABNB -1.43%) were tumbling 7.6% at 11:22 a.m. ET Friday morning on no company-specific news, but it follows a week where the short-term vacation rental hub saw shares soar 28% from where they closed last Friday.
Airbnb reported better-than-expected fourth-quarter results, with revenue rising above forecasts to $1.9 billion and a near-sixfold increase in income to $352 million.
Image source: Getty Images.
So what
Like many tech companies of late, Airbnb was able to reduce the number of employees on the payroll, but achieve better results. The rental platform reduced its workforce by 5% from the year-ago period and the savings rolled to the bottom line.
But Airbnb is benefiting more from the rebound in travel. While there has been anecdotal criticism of the nickel-and-dime fees it's been imposing on users, which raised the specter of a backlash that could see hotel use rise, that hasn't really materialized. In fact, Airbnb reported nearly $2 billion in profits last year, a major turnaround from the $352 million net loss in 2021.
Now what
With the travel stock up 55% so far this year, especially after the robust earnings report it just issued, it's not surprising that shares are taking a breather as some investors take profits.
Yet there are fears the Federal Reserve will continue aggressively raising interest rates this year to control inflation, which could push the economy into a recession. That would hurt demand for travel and could exert downward pressure on Airbnb's stock.
