Can IPO Of Airbnb Be Called Successful?

Can IPO Of Airbnb Be Called Successful?

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The market has long been waiting for Airbnb – a company that owns an online platform for short-term apartment rental also called Airbnb – to become public.

There were a lot of rumors about the public offer, and it kept being rescheduled due to the pandemics. However, the IPO finally happened, and today, we are discussing what it was like.

The IPO in more detail

Trade started on December 10th in NASDAQ. The price of a stock was 68 USD.

A couple of days before the listing, the price fluctuated between 56 and 60 USD. According to the Wall Street Journal and Bloomberg, the company planned to attract 3.5-3.7 Billion USD.

51.3 million stocks were offered; also, 5 million stocks will be available to Goldman Sachs, Morgan Stanley, Citigroup, Barclays, and other underwriters at a lower price for 30 days after the offer.

At the beginning of the trades, the company was estimated at 47 billion USD. However, the stock price leaped from 68 to 163.47 USD per stock almost immediately. At such moments, the capitalization of the company was over 100 billion USD.

This was more than the aggregate cost of the three largest hotel chains in the US: Marriott International (43 billion USD), Hilton Worldwide (39 billion USD), and Hyatt Hotels (8 billion USD). It’s time to remind you that in April, investors estimated Airbnb at 18 billion USD.

AT the end of the first trade day, Airbnb stocks cost 144.71 USD each, demonstrating super-impressive growth by almost 113%. The market price of the company amounted to 86.5 billion USD, which was almost two times higher than at the beginning.

Airbnb in COVID-19 pandemics

The crisis provoked by the pandemics of the coronavirus became a serious blow for Airbnb. According to Bloomberg, the service lost 697 million USD in January-September, and the rental volume dropped by 72%.

The fragile hopes for some recovery that emerged in June were destroyed by the second wave of the coronavirus and new quarantine measures imposed by governments. Analysts say that the losses that the company will suffer this year, will be higher than ever before.

In more detail, you can read about the financial performance of the company in our recent article about the IPO of Airbnb.

Summing up

The company planned an IPO for this March, but the pandemics made it reschedule the event, and only for good.

On December 10th, the company started trading in NASDAQ and demonstrated unbelievable growth of stock prices for 113% during a day. According to CNBC, Airbnb is number 10 on the list of the most successful IPOs-2020.

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