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December is shaping up to be an explosive month for the debut of the IPO.
Shares of food delivery company DoorDash climbed 86% on Wednesday, closing at $ 190 each after the company raised a portion 3.4 billion dollars in its offer.
Here’s a look at the magnitude of those numbers: On a fully diluted basis, the company is valued at $ 72 billion. Even on an undiluted basis, the company catches a price tag of over $ 60 billion, pushing its valuation well above that of its competitor Grubhub (valued at $ 6.6 billion) and places it in the universe of companies like COVID-19 vaccine maker Moderna ($ 62 billion) and General Motors ($ 63 billion).
It’s a huge victory for the company’s private market shareholders, including SoftBank and Sequoia Capital, who funded the company through its latest private valuation of $ 18 billion.
DoorDash wasn’t the only one in its stock market rise, however. On the same day, Microsoft-backed cloud infrastructure company C3.ai surged 120% at the beginning.
Will Airbnb follow in their footsteps when it debuts today? So far, the numbers are pointing in the right direction for the home-sharing startup that has shown investors a stunning rebound from its pandemic lows. (Box CEO Aaron Levie went as far as nicknamed it a “perfect market hedge” via Twitter. “If you think the vaccine is coming quickly, people want to travel again. If you don’t think it happens quickly, people want to work remotely in different places for longer. “)
The company valued its IPO at $ 68 per share, raising $ 3.5 billion, significantly above the Airbnb price range first set earlier this month: $ 44 to $ 50 per share. And while the company’s revenue may not have returned from the pre-pandemic era, the assessment confirms its return, at least in the eyes of investors. In the most severe stay-at-home times of the pandemic, the company reduced its valuation to $ 18 billion, from $ 31 billion before the crisis hit. At the price of the IPO, Airbnb would be valued at $ 47 billion.
While the question for DoorDash is how it will fare after the pandemic, a key issue for Airbnb is precisely the opposite. What if the pandemic lasts longer than expected or if governments step up lockdown orders?
RETROACTIVELY DISTRIBUTING AN M&A MATTER: Facebook’s $ 1 billion acquisition of Instagram is now being hailed as negotiating magic, bringing new life to the social media business. Now state and federal regulators say the 2012 deal, as well as the $ 19 billion acquisition of Whatsapp in 2014, should be unwound. It comes as the United States Federal Trade Commission and nearly every state in the country have taken legal action for Facebook to buy rivals only to stifle competition. Read more.