Airbnb IPO raises $3.5bn, values firm at $47bn
Airbnb priced its long-awaited initial public offering (IPO) above a marketed range to raise about $3.5bn (€2.8bn), seizing on investor demand for a home-rental business roaring back from a pandemic-fueled slump.
The company’s IPO came just hours after DoorDash almost doubled from its listing price in its debut trading session.
Airbnb and its investors sold about 52 million shares Wednesday for $68 each after marketing them for $56 to $60 apiece, it said in a statement. At that price, Airbnb has a fully diluted value of about $47bn, which includes employee stock options and restricted stock units.
Airbnb’s listing adds to what was already a record year for IPOs, with more than $163bn raised on US exchanges. That includes DoorDash’s $3.37bn offering. Other companies lined up for IPOs this month include video-game company Roblox, installment loans provider Affirm Holdings and ContextLogic, the parent of online discount retailer Wish.
For Airbnb to hang on to any lofty valuation, it will need to grapple with a litany of threats, as outlined in its IPO prospectus, ranging from a surge in party houses that carry liability risks to an increase in professionally run properties that lack the charm that made Airbnb rentals famous.
San Francisco-based Airbnb has seen a bounce back in domestic bookings since the early days of the coronavirus pandemic crushed demand.
In a letter to shareholders, the three co-founders said the 10 months since the pandemic started have been “the most defining period since we started Airbnb”.
In the past 13 years, Airbnb has totally upended the travel market, given people an opportunity for income and created a whole new market for services related to real estate and hosts. Today, Airbnb is one of the biggest travel companies in the world.
The company’s IPO plans were put on hold in March as the pandemic ground global travel to a halt. By April, room bookings had plunged 72pc. Airbnb rolled out a blanket refund policy and doled out more than $1bn in cancellation fees.
In the third quarter, Airbnb’s revenue declined only 18pc, compared to the near 60pc decline for Expedia and Marriott International.
That three-month period was Airbnb’s most profitable ever.
Katie Roof and Olivia Carville
source:independent.ie