Airbnb valuations skyrocket to $86.5 billion on the first day of its stock market listing making the online rental marketplace even bigger than some of the big hotel chains like Marriott and Hilton.
On Thursday, December 10, the American online rental marketplace Airbnb Inc made a blockbuster debut on the Nasdaq Stock Market. On the very first day of listing, Airbnb stock (NASDAQ: ABNB) jumped 112% from its listing price of $68 per share.
As of Thursday closing, ABNB stock was trading at a price of $144 as the company’s market cap jumped to $86.5 billion. The investor confidence was also high as the company doubled its valuations on the listing day. Moreover, Airbnb also surpasses the valuations of travel giants like Booking.com and Expedia.
Interestingly, Airbnb also topples other big hotel chains like Hilton and Marriott. With these massive first-day listing gains, ABNB stock makes the tenth-best IPO debut in 2020. This comes despite the fact that Airbnb has suffered major blows to its business with the Coronavirus pandemic.
The public health crisis and government lockdowns have given a hammer blow to global travel. During these tough times, Airbnb made significant changes to its businesses to stay afloat. Unfortunately, this also includes cutting down on staff and reducing operational expenses.
However, Airbnb benefits from the fact that travelers who started moving out during the summer preferred homestays over hotels. Last quarter, the company’s revenue shrank 19% to $1.34 billion. During an interview with CNBC on Thursday, Airbnb CEO Brian Chesky said:
“Now that people are coming to Airbnb, they don’t even necessarily have a destination in mind or dates, because they’re flexible. We’re all obviously on Zoom, and so people are saying, ‘I want to go anywhere 300 miles around me, what can you show me?’ Now we’re going to be getting a little bit more into the game of inspiration and matching people to the perfect home experience for them.”
Airbnb Bringing Benefits to Hosts with IPO and Awesome Debut
Airbnb said that the recent fundraising through IPO will also help its host partners through grants and programs. The company wrote:
“We want hosts to share in our success, not merely for a single moment in time, but for as long as Airbnb exists in the world. We intend the Host Endowment Fund to be a long-term investment in the future of our host community, to be shaped by hosts for hosts.”
In its IPO listing, Airbnb also set aside 3.5 million non-voting shares for hosts. This accounts for nearly 7% of the total public offering. Airbnb host Travis Schurr who has more than 20 houses listed in the Las Vegas area said that he bought more than 200 shares, the maximum permissible limit for a host. On the very first day, Schurr turned his $13,600 investment to $28,942.
Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
