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As Airbnb files to go public, traders break down where Expedia, Booking are headed

Airbnb has made it official.

The company announced this week it has filed to go public after submitting a draft registration to the Securities and Exchange Commission. 

This comes as travel booking stocks Expedia and Booking Holdings have shown signs of life. Booking has bounced 60% and Expedia 118% off March lows, clawing back from losses sustained earlier in the year as the pandemic worsened and lockdowns went into effect.

Danielle Shay, director of options at Simpler Trading, is avoiding Expedia and Booking despite their recent rallies.

“Looking at Expedia and Booking right now, the reason why I’m very bearish on these stocks is because of air travel. I mean, Booking, yes they do have the vacation rentals but what about air travel? Same thing with Expedia. Air travel is down 70% year over year,” Shay said Thursday on CNBC’s “Trading Nation.”

MKM Partners chief market technician JC O’Hara is also closely watching air travel as a leading indicator for the travel reservation stocks.

“I would closely monitor the daily data from TSA checkpoints. This data basically counts how many travelers are passing through the airport over a 24-hour period. It’s similar to counting mall traffic for retail stocks,” O’Hara said in the same “Trading Nation” segment.

To highlight the impact on the travel stocks, O’Hara overlaid the TSA checkpoint data on top of the stock performances of Expedia and Bookings.

“We can see that they both meaningfully rebounded off those March lows, but they’ve basically been flat since June,” O’Hara said. “So I would turn incrementally more positive on Expedia and Booking if we start to see a meaningful pickup in those airport traffic numbers.”

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The number of travelers passing through airport checkpoints fell 74% in July compared with a year ago, according to the Transportation Security Administration.

Airbnb, though, could get a boost from positive momentum in the initial public offering space, Shay said.

“Airbnb looks incredibly hot. The market has loved IPOs. This is something that’s likely going to be pretty volatile and it’s probably going to make for some great options trading, especially because of how popular it is during the pandemic,” said Shay.

The Renaissance IPO ETF, which holds stocks such as Zoom Video and Moderna, is up 48% this year.

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