Ahead of one of the most anticipated tech IPOs of the year, Airbnb priced its shares at $68 apiece.
Following a year of financial downturn caused by the Covid-19 pandemic, Airbnb is set to launch its initial public offering (IPO) today (10 December). According to The Wall Street Journal, the company has set its share price at $68 each, which exceeds the target range of between $56 and $60 set earlier this week.
This pricing gives Airbnb a valuation of around $47bn based on a fully diluted share count, and includes the $3.7bn it is set to raise through proceeds of the offering. Morgan Stanley and Goldman Sachs will lead the company’s IPO, with the former acting as a ‘stabilisation agent’ to intervene and steady trading of Airbnb stock by buying shares. The shares will trade under the symbol ABNB.
This filing revealed the economic impact caused by the Covid-19 pandemic, showing the company earned $2.5bn in revenue for the first nine months of 2020, a 32pc drop on the same period in 2019.
Getting through a pandemic
Airbnb also reported Q3 profits of more than $219m on $1.3bn in revenue. While this showed a small rebound from its Q2 net loss of more than $575m, the company’s overall net loss for the first nine months of 2020 was almost $697m.
In its filing, Airbnb warned of the impact of Covid-19 on its finances, saying the pandemic had a “disproportionately negative effect on the travel industry”.
“In order to protect our business from these near-term market disruptions and the prospect of a prolonged business impact, we raised $2bn in the form of term loans in April 2020 and took action to dramatically reduce our operating expenses,” it added.
“We believe these incremental funds and our rapid management of expenses, in addition to our existing cash position, will help us to prudently manage our business through the effects of the Covid-19 pandemic.”
The IPO comes after Airbnb launched a new non-profit venture – Airbnb.org – to facilitate temporary stays for people in times of crisis. Airbnb.org will allow hosts on Airbnb to provide free and discounted stays to people impacted by emergencies, including natural disasters and the Covid-19 pandemic.