We all knew that Airbnb (NASDAQ:ABNB) was going to be something of a revolution in terms of travel accommodations. And why not? Instead of staying in the cookie-cutter room that most hotels offer, you could stay in a house. Someone else’s house, sure, but a house nonetheless. And now, Airbnb is up over 8% in Tuesday afternoon’s trading as it prepares to join the S&P 500.
Airbnb will be taking over the slot formerly held by Newell Brands (NASDAQ:NWL), which itself will be dropping down a notch to take over the slot held by Universal Insurance Holdings (NYSE:UVE) in the S&P SmallCap 600. The reason behind the switches is simple: the stocks losing their slots were no longer considered “representative” of the market in which they were listed. Newell Brands, for example, is now more representative of a small-cap stock than a large-cap.
The development comes at an unusual time for Airbnb. It’s about to lose a large swath of its New York business thanks to a slate of new rules that are sending several smaller Airbnb properties rushing for the door. Local Law 18 not only establishes a slate of new rules, but it almost completely bans small operations, noted a Wired report, as the rules are so onerous they can’t be met. Despite Airbnb’s efforts to sue New York City over its new laws, judges passed on the case altogether, calling New York’s response “entirely rational.”
Analysts, like investors, remain unfazed. With 13 Buy ratings, 15 Holds, and three Sells, Airbnb is considered a Moderate Buy according to Wall Street. Further, with an average price target of $149.81, Airbnb offers investors a modest 4.49% upside potential.
