Airbnb stock slides 13% as execs warn of a potential booking slowdown in the second quarter

Airbnb shares fell in premarket trading Wednesday after execs warned of a tougher second-quarter.

KENA BETANCUR/AFP via Getty Images

• Airbnb shares fell 13% in Wednesday's premarket trading after it reported earnings.
• The company broadly beat Wall Street's expectations but warned of a tougher second quarter.
• Execs said comparisons would be difficult given last year's build-up of post-COVID demand.

Airbnb shares plunged in early-morning trading Wednesday after the company warned of a potential slowdown in bookings over the second quarter.

The stock fell 13% to trade at just under $111 shortly after 4 a.m. Eastern Time as investors digested the company's latest earnings report, published after Tuesday's closing bell.

Airbnb posted first-quarter earnings-per-share of 18 cents and revenue of $1.82 billion, beating the 9 cents per share and $1.79 billion targets set by Wall Street analysts, according to Refinitiv.

The company forecast that it would log revenue of between $2.35 billion and $2.45 billion in the three months ending June 30 but warned of a likely slowdown in bookings compared to 2022, when it benefited from pent-up post-COVID demand.

"Nights and experiences booked will have unfavorable year-over-year comparisons in Q2 2023 as we overlap pent-up 2022 demand following the COVID Omicron variant," Airbnb said in a letter to shareholders.

On a post-earnings call, executives said that customers could expect to see "big changes" from the integration of OpenAI's upgraded GPT-4 chatbot into its platform over the next year.

The company added in its shareholder letter that its three strategic priorities are making hosting on Airbnb just as popular as traveling is, making booking more affordable for its guests, and increasing its global presence.

Before Wednesday, the lodging stock had jumped 49% year-to-date, in line with the broad tech stock rally that's been fueled by investors' expectation that the Federal Reserve will soon cut interest rates.

Its total market capitalization will fall by around $10 billion if the premarket losses hold up until the closing bell.

Read more: Big tech stocks have started 2023 on a tear. Now they face a moment of truth.

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