|If I were one of the investors that have bought shares of Airbnb once the price has doubled since the IPO, I would not be very relaxed. The truth is that Airbnb has yet to live up to the expectations of the IPO price, as the fundamentals of the company don’t justify that valuation. So, paying the double for the shares doesn’t seem a smart decision. But as we know the stock market is also fueled by speculation, so anything is possible, especially with a brand as powerful as Airbnb. On other hand, despite the competitive arena of Airbnb and its business is extremely complex, most of the small investors know Airbnb, probably have been users of it and think that they understand the business. At the end, it is just the travel industry…everybody knows about travel…..
In 2020’s largest deal yet, Airbnb has finally pulled off its long-awaited IPO, raising $3.5 billion and capping a drawn-out exit for its venture and private equity backers. The Wall Street Journal and Bloomberg report that its shares were sold at $68 apiece, giving the pioneering home-rental giant a fully diluted value of $47 billion. Airbnb’s final price for the 51.6-million-share offering was revised upward twice from an initial estimated range of $44 to $50.
The company’s haul of $3.5 billion marks the largest of the year, according to PitchBook data, beating out DoorDash’s $3.37 billion offering and deals from Snowflake and Palantir. It also sets up a massive payday for Airbnb’s top shareholders, Sequoia, with a 16.5% pre-IPO stake, and Founders Fund at 5.4%.
Airbnb has had a topsy-turvy year, after securing $2 billion in funding at a $18 billion valuation in April—down from $31 billion in 2017. But under CEO and co-founder Brian Chesky, the company proved resilient during the pandemic, pulling off a rebound in bookings over the summer that led to a third-quarter profit.