Airbnb shares more than double in stock market debut

11 Dec 2020907 Views

Image: © Postmodern Studio/Stock.adobe.com

At the end of an ‘incredibly difficult’ year, Airbnb now has a market cap of $86.5bn.

Airbnb made its long-awaited stock market debut yesterday (10 December), with shares soaring after the opening bell. Shares were priced at $68 the day before the IPO, but closed the first day of trading at $144.71 a share.

This gives the company a market capitalisation of around $86.5bn, according to CNBC, more than double the $47bn that had been expected the previous day. It also makes it one of the largest IPOs of 2020.

Airbnb will now trade under ABNB on Nasdaq. Instead of the traditional ceremony where a company rings the Nasdaq opening bell, Airbnb created a video of hosts around the world ringing their own bells.

In the video, Airbnb CEO Brian Chesky described this as a “significant” moment in an “incredibly difficult” year.

“I could have never imagined in January where we would be in June, with very difficult circumstances, and then now to get to here’
– BRIAN CHESKY

Airbnb and the travel industry at large were hit hard by the pandemic in 2020.

In April, the company announced that it had secured $2bn in two separate financing deals to help get through “the storm of the pandemic”. The following month, it was confirmed that 25pc of the company’s staff would need to be let go, amounting to around 1,900 people.

Airbnb’s IPO fillings, which were published last month, showed just how badly business had been affected by Covid-19 and travel restrictions.

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The documents revealed that the company earned $2.5bn in revenue for the first nine months of 2020, a 32pc drop on the same period in 2019. Overall net loss for the first nine months of the year was almost $697m.

“I could have never imagined in January where we would be in June, with very difficult circumstances, and then now to get to here,” Chesky told CNN yesterday.

Looking ahead, he said the travel industry is going to be “just fine”, but it will different to what was seen before because “the world is going to be different”.

Chesky, who co-founded Airbnb in 2008 with Nathan Blecharczyk and Joe Gebbia, could be worth over $11bn after the IPO, according to Fortune calculations.

In the opening bell livestream yesterday, Adena Friedman, president and CEO of Nasdaq, acknowledged that it has been a difficult year for the company but there are opportunities ahead.

“After a two-month setback due to travel restrictions with Covid-19, Airbnb’s business model began to bounce back in impressive ways,” she said.

“People wanted to get out of their homes and yearned to travel, but they didn’t want to go far or be in crowded hotels. Domestic travel increased around the world. Millions of Airbnb guests took trips closer to home and stays became longer than a few days as work from home became work from any home.”

Sarah Harford is sub-editor of Silicon Republic

editorial@siliconrepublic.com