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NEW YORK: Airbnb shares more than doubled in a US market debut on Thursday (December 10) that made the shared housing platform an elite group of high-value companies.
The shares opened at $ 146, a dizzying rise after the San Francisco-based firm traded them at $ 68 for its initial public offering.
They closed at $ 144.71, a 113 percent increase on market debut.
At those levels, Airbnb is worth more than $ 100 billion, including restricted stock and options, up from $ 47 billion at the IPO price.
That puts the 13-year-old company on par with major global firms like IBM, 3M and American Express, for example.
Airbnb raised about $ 3.4 billion in the offering amid a fever fever for new shares in companies adapting to lifestyle changes imposed by the coronavirus pandemic.
The company is listed on the Nasdaq Stock Exchange under the ticker symbol “ABNB.”
Gregori Volokhine, portfolio manager at Meeschaert Financial Services, said interest in Airbnb was high because “investors are under the impression that this is the birth of a new platform, a company that can completely revolutionize the world of tourism.”
Airbnb’s debut comes just one day after food delivery group DoorDash’s spectacular entry to Wall Street with a 75% jump on its first day of operation.
DoorDash made its debut with a hefty $ 39 billion valuation, on the heels of IPOs by others in the tech sector and the on-demand economy that point to frenzied demand for the stock.
Airbnb has said its shared housing model proved resilient during the global pandemic, posting a profit of $ 219 million in the quarter that just ended.
The 13-year-old company, valued at $ 31 billion in its latest round of private financing, is confident it will prosper over time.
“We believe that as the world recovers from this pandemic, Airbnb will be a vital source of economic empowerment for millions of people,” he said in his initial public offering filing.
Food delivery group DoorDash saw its shares surge in its Wall Street debut this week in a sign of frenzied demand from startups adapting to the coronavirus pandemic. (Photo: AFP / Olivier DOULIERY)
“CHANGING DYNAMICS”
Airbnb recently implemented new security protocols for many of its hosts and maintains that listings that meet its improved guidelines are safer than hotels during the pandemic.
The platform now has more than four million listings in countries around the world and has served more than 825 million bookings.
Research firm New Constructs said Airbnb “has a plausible path to profitability and growth” if it can contain costs while expanding its global presence.
Airbnb and DoorDash’s stock market debuts this week are part of a “unicorn parade” culminating a busy year for startups going public.
Unicorn startups, valued in the billions, are poised to tap into a hungry market for young companies that promise rapid growth, with some taking advantage of lifestyle changes due to the coronavirus pandemic.
There have been 420 IPOs in US markets so far this year, 88 percent more than at this time last year, according to StockAnalysis.com.
Snowflake, a cloud storage computing company that was listed earlier this year, has seen its valuation rise to more than $ 100 billion in what some analysts say is a sign of a new tech bubble.
A key question is whether these startups represent the future or are they just a flash in the pan.
Some analysts say the pandemic has distorted the economy and that it is too early to tell how businesses will fare.
