Airbnb IPO kicks off at $146 per share; valuation reaches $100 billion

After pricing above its raised range, Airbnb opened at $146 per share. This is up around 115% to kick off its life as a public company. The company is now worth $158 per share. Using its IPO share count inclusive of shares reserved for underwriters, the company is worth $95.1 billion. But on a fully diluted basis, including shares that could be exercised or awarded in the future, Airbnb is worth much more.

The unicorn initially targeted $44 to $50 per share in its debut. Then, later raised that range to $56 to $60 before pricing at $68 per share. The listing came 10 months after the Covid-19 pandemic upended travel and 24 hours after DoorDash Inc. soared in its public debut. Now, to open at such a premium is not shocking. Given how the debuts of DoorDash and C3.ai performed earlier in the week. And in September, Snowflake completed the largest software-technology IPO in history; with a 258% surge and has been on a tear since its debut.

The soaring valuations for IPOs give many market veterans a pause. Yet, Airbnb is at least earning money, unlike 80% of firms that have sold new shares in 2020. The company just reported its most profitable quarter ever. “I don’t know what else to say. I’m very humbled by it.” Airbnb CEO Brian Chesky said a Bloomberg interview when indications showed the stock could open at more.

Pre-IPO conditions

Airbnb's private valuation fluctuated dramatically this year. It dropped from $31 billion to $18 billion as the COVID-19 pandemic devastated its business. This forced the company to lay off 25% of its workforce and raise more than $2 billion in debt and equity financing and even calling the timing of its IPO into question.

The company’s IPO plans were put on hold in March as the pandemic ground global travel to a halt. By April, room bookings and experiences had plunged 72%. Airbnb rolled out a blanket refund policy and doled out more than $1 billion in cancellation fees. By June, though, things were starting to look up as the lockdown slowly started opening in major countries.

International travel was down, but demand for domestic, short-distance trips and stays outside of the top 20 cities proved resilient.

“Today, Airbnb is thriving, and when effective vaccines are broadly available, it will no doubt adapt to those changed circumstances as well,” Hoffman said. Reid Hoffman is an early Airbnb investor and works with Greylock Partners.