Wednesday, November 29, 2023

Traveling Far Away: Airbnb IPO Breaks 2020 Records | News from the United States and Canada

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Airbnb has made a comeback as travelers wary of coronaviruses have shown a preference for renting private homes over hotel rooms.

Shares of Airbnb Inc more than doubled in the company’s debut Thursday, valuing the house rental company at just over $ 100 billion in the largest U.S. IPO in 2020 and ending an exceptional year in which investors flocked to technology stocks.

Airbnb opened at $ 146 on the Nasdaq, well above the initial public offering (IPO) price of $ 68 per share that raised $ 3.5 billion for the company. The stock hit a high of $ 165 and closed at $ 144.71.

The IPO is the culmination of an astonishing recovery in Airbnb’s fortunes after the company’s operations were severely damaged by the COVID-19 pandemic earlier this year.

But as lockdowns eased, more travelers chose to book homes over hotels, helping Airbnb to post a surprise profit for the third quarter. The San Francisco-based company has also benefited from increased interest in renting homes away from major cities.

“I don’t think too many people this summer expected to see an Airbnb IPO this year,” Brian Chesky, Airbnb chief executive, told Reuters news agency in an interview.

“We were planning to go public, we put our IPO on hold and it was the most amazing trip. This has been a big comeback for our hosts and for what I hope will be travel, ”added Chesky, whose stake in Airbnb is now worth around $ 11 billion.

Founded in 2008 as a website to support conference room bookings, Airbnb had a listing that was one of the most anticipated US IPOs of 2020, which has already been a record year. for stock quotes.

The Warner Music Group label, data analytics company Palantir Technologies, and data warehouse company Snowflake Inc have all gone public in recent months.

At the start of Nasdaq trading, Airbnb had a market cap of $ 86.5 billion, eclipsing that of online travel agency Booking Holdings Inc and hotel chain Marriott International Inc.

Including securities such as options and restricted stock units, Airbnb’s fully diluted valuation was $ 100.7 billion, more than five times the $ 18 billion Airbnb was valued at in a private fundraiser in April at the start of the pandemic.

Airbnb was valued at $ 31 billion in its last private pre-COVID-19 fundraiser in 2017.

Airbnb’s meteoric rise in shares when it debuted comes just a day after the share price of food delivery company DoorDash Inc doubled on its first day of trading.

Such large day one trading gains are likely to fuel criticism from some venture capitalists, including Benchmark’s Bill Gurley, who say investment banks are undervaluing IPO prices so that their investor clients can realize significant gains when the stock begins to trade.

These proponents have pushed companies to consider listing their shares through a direct listing, in which bankers have little influence over the price at which the shares are sold.

Chesky said Airbnb will focus on things that are under the control of the company.

“At this point, the price of the shares is not something that we control. I have encouraged our employees to focus on the things they can control, ”said Chesky, speaking before the stock began trading.


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