Airbnb set to debut, value could exceed $ 100 billion

The stock will begin trading on Thursday, with the first price indications reaching $ 150 per share, well above the IPO price of $ 68. The listing comes 10 months after the coronavirus pandemic disrupted travel and 24 hours after DoorDash Inc. supercharged investor expectations by nearly doubling its frenzied public debut.

“I don’t know what else to say,” Airbnb chief executive Brian Chesky said when told about the potential opening price in an interview with Bloomberg Television. “I am very touched by this.”

Airbnb had already valued its initial public offering well above a range marketed on Wednesday, to raise around $ 3.5 billion. At the IPO price, its fully diluted valuation was $ 47 billion. At $ 150 per share, that number would climb to over $ 100 billion.

Airbnb stock isn’t trading yet, and price quotes may change minute-to-minute in the hours leading up to its official debut.

DoorDashThe first wave of Airbnb – bringing its fully diluted value to around $ 71 billion – played a role in Airbnb’s discussions about pricing its IPO above the marketed range, according to people close to the market. folder. An Airbnb representative declined to comment on this point.

To hang on to its high valuation, Airbnb will face a litany of threats, as noted in its IPO prospectus, ranging from an increase in party houses that carry liability risks to an increase in properties. managed by professionals who lack the charm that made Airbnb rentals famous.

Airbnb and DoorDash propelled IPO volume to an all-time high for December, surpassing the $ 8.3 billion mark set for the month in 2001 and 2003, according to data compiled by Bloomberg.

There is more to come. Other consumer-oriented web companies slated to go public this month include video game company Roblox Corp., installment loan provider Affirm Holdings Inc., and ContextLogic Inc., the parent company of online retailer Wish. Inc. is already a banner year for IPOs, with more than $ 166 billion raised on U.S. exchanges, including Airbnb and DoorDash, the data shows.

Airbnb’s offering was led by Morgan Stanley and Goldman Sachs Group Inc. Its shares will trade on the Nasdaq Global Select Market under the symbol ABNB.

Pandemic crash

San Francisco-based Airbnb has seen a rebound in domestic bookings since the early days of the pandemic that crushed demand.

“No year in our history has been as wild and crazy and defining as this year,” said Chesky in a previous interview, from the Rausch Street apartment in San Francisco where the Airbnb idea originated in 2007 .

Over the past 13 years, Airbnb has totally revolutionized the travel market, given people an income opportunity, and created a whole new market for real estate and guest services. Today, Airbnb is one of the largest travel agencies in the world.

The company’s IPO plans were put on hold in March as the pandemic came to a halt around the world. In April, room bookings and experiences had plunged 72%. Airbnb has a comprehensive refund policy in place and distributed over $ 1 billion in cancellation fees.

In June, however, things were starting to improve. City dwellers who were fed up with being stuck inside their homes took their cars and drove to mountain towns and rural communities, often settling for weeks or months at a time, like work-from-home policies allow.

Domestic boost

International travel was down, but demand for domestic and short-haul travel and stays outside the top 20 cities held up.

In the third quarter, Airbnb revenue fell only 18%, compared to nearly 60% for Expedia Group Inc. and Marriott International Inc. The three-month period was also the most profitable on record for Airbnb, on basis of earnings before interest, taxes and depreciation. and depreciation.

For the first nine months of 2020, Airbnb recorded a net loss of $ 697 million on revenue of $ 2.5 billion, compared to a net loss of $ 323 million on revenue of $ 3.7 billion for the same period last year, according to his documents.

Airbnb survived the depths of the crisis by cutting marketing spending and laying off about a quarter of its staff in the spring.

“It has been a relentless year,” Chesky said. “I feel like I’m 39 and 59 because I feel like we’ve had to make some decisions for about 20 years in the last eight months.”

This story was posted from a feed with no text editing. Only the title has been changed.

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Eric Harris

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