On Thursday, Airbnb sold investors on an even unlikelier story: that it is a pandemic winner
Brian Chesky, Airbnb CEO, is projected at Nasdaq MarketSite in New York's Times Square on Thursday, Dec. 10, 2020, during Airbnb’s initial public offering launch. Over the last decade, Airbnb has upended the travel industry, riled regulators, frustrated local communities and created a mini-economy of short-term rental operators, all while spinning a warm narrative of belonging and connection.
Image: Hiroko Masuike/The New York Times
SAN FRANCISCO — Over the past decade, Airbnb has upended the travel industry, riled regulators, frustrated local communities and created a mini-economy of short-term rental operators, all while spinning a warm narrative of belonging and connection.
On Thursday, Airbnb sold investors on an even unlikelier story: that it is a pandemic winner.
The company’s shares skyrocketed on their first day of trading, rising 113% above the initial public offering price of $68 to close at $144.71. That put Airbnb’s market capitalization at $100.7 billion — the largest in its generation of “unicorn” companies and more than Expedia Group and Marriott International combined.
Airbnb’s offering raised $3.5 billion, making it the biggest IPO this year.
Just a day earlier, DoorDash, a food delivery startup, also defied gravity by raising $3.4 billion in its first day of trading, when its share price surged 86% to a valuation of $68 billion. Both debuts followed a string of other hot IPOs that together make 2020 the busiest year for U.S. public offerings since 1999, according to Renaissance Capital, which tracks IPOs.
The hair-bending offerings this week have raised talk of a new stock market bubble in the midst of a pandemic-induced downturn, as more than 947,000 workers filed new claims for state unemployment benefits last week. With interest rates low and fiscal stimulus goosing parts of the economy, investors have chased ever-riskier bets, driving valuations of unprofitable startups to levels that seem divorced from reality. Robinhood, a stock trading app whose use has spiked in the pandemic, has also flooded the market with millions of day traders eager to get a piece of brand-name tech companies.
©2019 New York Times News Service