After IPO, Airbnb Is Now Worth More Than Marriott, Hilton And Hyatt Combined
Well, that escalated quickly.
At the close of Airbnb's first day of public trading on the Nasdaq stock market Thursday, its stock price shot up 113% from the $68 price it set for its initial public offering the day before: from $68 to $144.71. Its fully diluted valuation, which includes shares not available on the public market, rose past $100B, making it the biggest online travel company in the world, Bloomberg reports.
At its closing value, Airbnb is now worth more than the three biggest publicly traded hotel chains in the world combined. Airbnb co-founder and CEO Brian Chesky appeared on Bloomberg TV Thursday morning, where he was told about swirling rumors of his company's gigantic price bump. Chesky was left speechless.
Airbnb CEO & Co-Founder Brian Chesky reacts to the company's IPO price more than doubling ahead of trading ▶️ https://t.co/bCnDxeBLWU pic.twitter.com/9FGV5gYmhd
— Bloomberg (@business) December 10, 2020
In what will ultimately go down as a historic week for tech startups, Airbnb entered the public market one day after online food delivery app DoorDash, which gained 85% value when it hit the stock exchange on Wednesday, valuing it at $70B. DoorDash's jump gave Airbnb confidence to price its IPO at $68 per share, far above the $30 that was projected when it filed its S-1 form with the Securities and Exchange Commission, Mint reports.
The home-sharing pioneer may have inspired investor confidence by turning a profit in the third quarter before pandemic travel restrictions have been lifted. In the spring months, when Airbnb and the rest of the hospitality industry saw business dry up overnight, the company responded by reimbursing guests who canceled reservations and dipping into its own balance sheet to partially repay its hosts, Chesky said. To help offset those and other costs, Airbnb laid off a quarter of its workforce, along with raising $2B in short-notice debt and equity.
Airbnb also set aside 9.2 million voting shares for a fund dedicated to targeted programs and grants for its hosts. In a more public but less tangible show of gratitude, the company posted a video of its hosts ringing bells for its initial trading, rather than following the tradition of founders ringing the opening bell on the floor of the New York Stock Exchange.
As for the voting shares, Airbnb's three founders can jointly retain control by possessing Class-B stock, which grants the holders 20 votes per share, as opposed to the one-share-one-vote Class-A stock trading on the open market, Bloomberg reports.
Chesky owns 15.1% of the company, with his co-founders Nathan Blecharczyk and Joseph Gebbia owning 13.9% apiece, Barron's reports. Private equity investor Sequoia Capital owns the single largest piece of Airbnb at 16.4%. Goldman Sachs and Morgan Stanley were the IPO's lead underwriters, a group that bought $200M worth of shares out of the $3.7B Airbnb raised the day before it hit the public market.
