WEBULL

In the wake of Airbnb, Inc.'s (NASDAQ:ABNB) latest US$3.3b market cap drop, institutional owners may be forced to take severe actions

Simply Wall St · 05/27 10:20

Key Insights

  • Institutions' substantial holdings in Airbnb implies that they have significant influence over the company's share price
  • A total of 10 investors have a majority stake in the company with 50% ownership
  • Insider ownership in Airbnb is 28%

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A look at the shareholders of Airbnb, Inc. (NASDAQ:ABNB) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are institutions with 59% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And institutional investors saw their holdings value drop by 4.1% last week. The recent loss, which adds to a one-year loss of 14% for stockholders, may not sit well with this group of investors. Institutions or "liquidity providers" control large sums of money and therefore, these types of investors usually have a lot of influence over stock price movements. As a result, if the decline continues, institutional investors may be pressured to sell Airbnb which might hurt individual investors.

In the chart below, we zoom in on the different ownership groups of Airbnb.

See our latest analysis for Airbnb

ownership-breakdown
NasdaqGS:ABNB Ownership Breakdown May 27th 2025

What Does The Institutional Ownership Tell Us About Airbnb?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

We can see that Airbnb does have institutional investors; and they hold a good portion of the company's stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Airbnb, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
NasdaqGS:ABNB Earnings and Revenue Growth May 27th 2025

Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. Airbnb is not owned by hedge funds. With a 11% stake, CEO Brian Chesky is the largest shareholder. For context, the second largest shareholder holds about 10% of the shares outstanding, followed by an ownership of 6.3% by the third-largest shareholder. Interestingly, the second and third-largest shareholders also happen to be the Top Key Executive and Member of the Board of Directors, respectively. This once again signifies considerable insider ownership amongst the company's top shareholders.

On further inspection, we found that more than half the company's shares are owned by the top 10 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Airbnb

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our information suggests that insiders maintain a significant holding in Airbnb, Inc.. It is very interesting to see that insiders have a meaningful US$22b stake in this US$78b business. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

With a 12% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Airbnb. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Case in point: We've spotted 1 warning sign for Airbnb you should be aware of.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.