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, opening at $146 each, 115 percent above its initial public offering price of $68. That put Airbnb’s market capitalization at $101.6 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, compared with DoorDash’s $3.4 billion, making Airbnb the biggest IPO this year.
The blockbuster offering came a day after DoorDash, a food delivery startup, also defied gravity on its first day of trading by surging 86% to a valuation of $68 billion. Both follow a string of other hot IPOs that together make 2020 the busiest year for US 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.
“There obviously is a tremendous amount of enthusiasm,” said Scott Kessler, an analyst at the research firm Third Bridge. “It’s just hard to really feel comfortable and confident about valuation levels.”
The exuberance is a sharp turnaround from last year, when a lackluster IPO from ride-hailing giant Uber and a failed IPO attempt from office company WeWork humbled the tech industry, leading to caution and layoffs at the beginning of 2020. The dismay intensified with the onset of the pandemic, with many startups cutting back in anticipation of a slowdown.
But over the summer, the tech industry surged and the stock market came roaring back. A wave of tech IPOs delivered gushers of cash to Silicon Valley startups, their investors, founders and employees. Airbnb’s valuation now tops Uber and approaches the level of Facebook at its IPO in 2012.
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