Our mission to improve business is fueled by readers like you. To enjoy unlimited access to our journalism, subscribe today.
Airbnb shares soared 135% soon after its public debut, catapulting the home rental company’s valuation to over $ 100 billion following a high-profile initial public offering.
The company had valued its IPO at $ 68 per share. But on Wednesday, its stock opened on the Nasdaq at $ 148, then climbed to $ 160.
“In March and April, I didn’t think it would still be possible to go public this year,” said Nathan Blecharczyk, Airbnb co-founder and chief strategy officer. “But I think this pandemic has demonstrated the resilience of Airbnb’s business.”
Airbnb plans to use the money raised to help it grow its home and experience rental business, where travelers connect with locals to do things like attend a cooking class, learn to surf. or take a walk. Before the pandemic, the company was planning to expand into other areas of travel, such as helping travelers get around and what to do after they arrive. Blecharczyk said it’s still a long-term goal, but the company has focused on its core services.
Airbnb’s IPO comes during a difficult year for the travel industry. Company bookings have slowed amid the pandemic, creating massive upheaval This made some people wonder if the business could survive.
The IPO also comes a day after the DoorDash stock food delivery service. climbed more than 80% when it debuted on the New York Stock Exchange. DoorDash shares had fallen 7% by noon on Wednesday.
But while DoorDash saw a massive surge in customer numbers during the pandemic, Airbnb’s story has been quite the opposite. In the second quarter, which was the height of the pandemic, Airbnb’s revenue fell 72% year-over-year to $ 334.78 million, while its losses widened to $ 575.6 million.
But as a result of certain cost-cutting measures, including dismissal 2000 employees, by cutting back on marketing and cutting executive salaries, the company began to see some recovery in May. Airbnb reported third quarter profit of $ 219.3 million, which the company credited to customers booking rentals for local travel and remote work.
Looking ahead, Airbnb said it will explore how to capitalize on the growing trend of close travel and remote work. Blecharczyk called it a “phenomenon” and said the company plans to highlight more local experiences and stays on its app.
“This is something we want to explore in more detail,” said Blecharczyk. “Enabling people to use Airbnb not just when traveling, but when living their everyday lives.”
More to read absolutely technological coverage of Fortune:
- 2020 was a record year for European technological investments. Not even a pandemic could slow it down
- Shipping times for the holidays for FedEx, UPSand the postal service
- Quantum computing is enter a new dimension
- Battery boot backed by Bill Gates claims a major advance
- The founder of Indiegogo launches Vincent, a site to discover alternative investments