Airbnb shares are anticipated to double when it goes public
An AirBnb sign will be displayed on the billboard on the NASDAQ market page on the day of its IPO in Times Square in the Manhattan neighborhood of New York City, New York, United States, on December 10, 2020.
Carlo Allegri | Reuters
Airbnb is set to double its share price by its IPO debut on Thursday at the latest in a wave of hotly anticipated tech IPOs in a year that has been tumultuous due to the pandemic.
The shares were valued at $ 68 on Wednesday and are expected to hit $ 150 when the stock starts trading, according to initial indications prior to initial trading. Airbnb is traded on the Nasdaq under the ticker "ABNB".
The company is going public at a time when the sector was hit by trends in reduced travel during the public health crisis. Revenue last quarter was down nearly 19% to $ 1.34 billion year over year. But it still managed to make a profit of $ 219 million, and there were other intermittently profitable quarters as well.
While travel was less, Airbnb managed to find a sweet spot for those willing to hit the road who prefer home stays over traditional hotels. That could change when vaccines make travel more accessible again, possibly as early as late next year.
Airbnb CEO Brian Chesky said in an interview with CNBC's Deirdre Bosa on the Thursday before going public that the platform is considering changing the way travelers want to plan their trips, as remote working is an option for many.
"Now that people come to Airbnb, they don't even necessarily have a destination or dates in mind because they're flexible. We're all obviously zoomed in, and that's why people say, 'I want to go anywhere 300 Miles around me, what can you show me? "He said. "Now we're going to dig a little more into the game of inspiration and tune people into the perfect home experience for them."
Chesky also said he wasn't too concerned about the rating.
"I don't think I'll be more concerned than I did in April and May when our business fell 80% in eight weeks in the middle of a pandemic," he said.
Airbnb struggled with complaints from hosts on its platform at the beginning of the pandemic, when the company indulged guest cancellations, leaving hosts with no expected payments. A Texas-based host filed a class action lawsuit against the company last month alleging that Airbnb breached its contract with hosts by offering the refunds. Airbnb called the lawsuit "frivolous and without merit" in a statement at the time.
As part of its IPO, Airbnb set up a Host Endowment Fund made up of 9.2 million non-voting shares. Airbnb said in its IPO prospectus that the fund would benefit hosts through programs and grants.
"We want hosts to share in our success, not just for a moment, but as long as Airbnb exists in the world," the company wrote. "We intend that the Host Endowment Fund will be a long-term investment in the future of our hosting community, built by hosts for hosts."
Airbnb was listed eight times on CNBC's annual Disruptor 50 list and ranks 41st in 2020 Disruptor 50 companies.
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