US: Airbnb has achieved a post-initial public offering [IPO] valuation of circa US$100 billion, marking a huge rise from the $47 billion at the IPO offering price and the $42 billion figure that was initially forecasted earlier this week.
The platform is raising around $3.5 billion in the process, and shares in the company soared 127 per cent to $146 [when Airbnb opened on the Nasdaq index] and then $154, another significant rise from the $68 figure that shares were immediately priced at for the IPO. Investors are believed to be selling close to 52 million shares, according to sources close to the matter speaking to Bloomberg.
In the middle of that spike, Airbnb has become the largest-ever firm to double its value on the first day of public trading. It will also trigger some fears that an exuberant market is pushing valuations of tech companies too high during an intense month of quick-fire IPOs.
The float ensures that Airbnb’s co-founders, CEO Brian Chesky, and executives Joe Gebbia and Nathan Blecharczyk, will all become multi-billionaires and have stakes worth over $10 billion.
The suggested $100 billion figure, which reportedly includes employee stock options and restricted stock units, rounds off a remarkable fightback from Airbnb, having recorded losses of $700 million in the first nine months of this year and seen the majority of its business decimated at the nadir of the Covid-19 pandemic.
Though previously resistant to the idea of taking Airbnb public, CEO Brian Chesky only began to firm up plans for an IPO last September and the platform was touted to begin the process in March, before the pandemic took hold on the world.
Airbnb’s resurgence is in stark contrast to the situation in March and April, when the company faced a sizeable backlash from hosts and guests alike over its perceived abruptness in cancelling bookings and performing a high-profile U-turn over its extenuating cancellation booking policy. CEO Brian Chesky pledged to pay out $250 million in cancellations back to hosts and lay on a $10 million Super Host relief fund, allowing previous guests to help out hosts with a personal note or financial contribution, and lobbying the US Government to provide short-term rental hosts with small business loans and grants.
In April, the embattled firm needed to raise $2 billion in two separate tranches of emergency funding to continue operating. The first $1 billion round was made up of debt and equity securities while the second was a $1 billion loan in senior debt, with private equity firms such as Silver Lake and Sixth Street Partners leading the investment.
In doing so, the firm was forced to lower its internal valuation from $31 billion to $26 billion, and later to as low as $18 billion.
Join International Hospitality Media editor-in-chief George Sell, along with Andrew McConnell [Rented.com CEO], Katherine Doggrell [Questex Hospitality Group editor-in-chief] and Sascha Hausmann [partner at HOWZAT ennea Group], for a special webinar this coming Friday 11 December at 14:00 GMT to dissect the Airbnb IPO and its impact on hospitality globally. Sign up to the session here.
