Airbnb Takes Flight On Wall Street Debut

Shares of Airbnb soared in their stock market debut on Thursday, valuing the home rental firm at US$101.6 billion in the biggest US flotation of 2020 and capping a bumper year that saw investors flock to tech darlings.

Shares opened at US$146 on the Nasdaq, far above the initial public offering (IPO) price of US$68 apiece that raised US$3.5 billion for the company. The stock hit a high of US$165, rising 142.6 percent after the debut.

The IPO highlights a stunning recovery in Airbnb's fortunes after the firm's business was heavily damaged by the Covid-19 pandemic earlier this year.

Founded in 2008 as a website to take bookings for rooms during conferences, Airbnb was valued at just US$18 billion in a private fundraising round in April and US$31 billion in its last pre-Covid-19 private fundraising in 2017.

The surge at opening adds billions to what was already a blockbuster payday for founders Brian Chesky, Nathan Blecharczyk and Joseph Gebbia and investors including Sequoia Capital and Peter Thiel's Founders Fund.

This year has seen a string of stellar debuts by technology startups including Wednesday's launch of DoorDash, which valued the food delivery company at more than four times the figure from a private fundraising round six months ago.

At US$146, Airbnb had a market capitalization of about US$87.2 billion, compared with Booking Holdings' US$86.3 billion and Marriot International's US$42.3 billion.

Airbnb struggled in the immediate aftermath of the pandemic as travel came to a grinding halt. It had to lay off a quarter of its workforce and seek US$2 billion in emergency funding from investors, including Silver Lake and Sixth Street Partners.

But as lockdowns eased, more travelers opted to book homes instead of hotels, helping Airbnb post a surprise profit for the third quarter. The San Francisco-based firm also gained from increased interest in renting homes away from major cities. (Reuters)