Airbnb Inc. is expected to value its stock above already elevated targets, which those familiar with the subject believe is another sign of a recovery in the IPO market.
Earlier this week, the Bank increased the target range to $56-60 a share, as investors expressed their enthusiasm for the shares above this range and the stock market continued its upward trend. The San Francisco Home Rental Startup is expected to set the price of its IPO on Wednesday, prior to the auction launch on Thursday.
The expected price indicates that Airbnb is valued at more than $42 billion on a fully diluted equity basis, with revenue from the offering expected to increase by more than $3.3 billion.
Airbnb’s management and insurance team followed other major IPOs this week:
Trading starts on Wednesday. The shares of the San Francisco-based food company were opened at nearly 80% above the IPO price, suggesting an estimate of $39 billion on a fully diluted basis, taking into account the proceeds of the offering.
When Airbnb launched its investor roadshow last week, the company set an initial target range of $44 to $50 per share. But it soon became clear that it was too low.
Both Airbnb and DoorDash make their debut in the record-breaking IPO market, thanks to the outstanding performance of recent technology lists. To date, more than $140 billion has been raised on U.S. stock exchanges by 2020, far exceeding the annual record of $107 billion reported by Dealogic in 1995, which was set at the height of the dot-com boom in 1999.
If, as expected, Airbnb reaches a public market value of more than $42 billion, the IPO will be an important milestone in a turbulent year for the company.
Airbnb planned to make its long-awaited debut early this year, but the pandemic took the airline by surprise with bookings in Asia, Europe, and the United States.
started raising capital to keep the company alive, laid off a quarter of the workforce and prevented the company from carrying out non-core activities. The company improved in the third quarter through a combination of significant cost reductions and unexpected growth in the number of people still in the country. The company’s profit for this period was $219 million.
Airbnb is expected to be the hottest bid in 2020. Instead, the equity giant has simply reduced its workforce by 25% and expects to halve its income in 2019. Pritica Ran, of WSJ, explains what made the company so vulnerable. PHOTO: Stephanie Swart of the Wall Street Journal.
The Covida 19 pandemic remains Airbnb’s biggest short-term problem. Investors should also consider risk factors such as cities with limited zoning for short-term leases and Airbnb’s difficulties in fighting crime and promoting hub security – an issue likely to be further addressed with Airbnb’s transformation into a public company. Airbnb is also one of the few Silicon Valley start-ups present in China, although the United States and Europe remain the largest markets.
December is generally a quiet period in the IPO market. Instead, there will be a flood of offers this year. In addition to Airbnb and DoorDash, video game company Roblox Corp. and the parent company of online retailer Wish, ContextLogic Inc. plan to make their debut later this year.
The Goldman Sachs Group Inc.
are Airbnb’s main IPO, and Morgan Stanley will be a stabilizer that will be able to intervene in the sustainable trading of the companies’ stock through share purchases. The shares start trading on
under the symbol ABNB.
Write to Maureen Farrell at [email protected].
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