Airbnb makes its Wall Avenue debut
Now, after a notable comeback, the home sharing company is set to make its long-awaited debut on Wall Street as the pandemic worsens and the state of the travel industry is once again challenged.
Airbnb is ready to start trading on Nasdaq on Thursday under the ticker “ABNB”. The company valued its IPO at $ 68 per share on Wednesday, rating the company at $ 47 billion.
The IPO price was well above the previously proposed range of $ 44 to $ 50 per share, indicating strong investor demand for a good week for tech companies to go public. On Wednesday, the delivery app DoorDash saw its shares surge 85% on its IPO.
In an interview with CNN’s Poppy Harlow on Thursday, CEO Brian Chesky said he “could never have imagined” the course of the roller coaster year the company has seen.
Chesky believes there are “two explanations” for the company’s stronger position today: one is that “people still crave travel,” and the other is based on advice from his father.
“I also remember something my father told me when I was growing up – and I had to tell myself that many times in the depths of our dark days. He said that things are never as good as they seem and how they are they seem bad as they seem. You have to kind of remember to find the midpoint between those highs and lows, “Chesky said.
While DoorDash has benefited greatly from people staying at home, Airbnb is benefiting from a successful vaccine rollout that is helping end the pandemic and allowing people to travel more.
Founded as Airbed & Breakfast in 2008, Airbnb revitalized the hospitality industry by promoting the once-unthinkable idea of renting out rooms in strangers’ homes. The platform is used to find and book accommodations in 220 countries and regions around the world. Airbnb now offers complete apartments, houses and hotel rooms for rent, as well as travel experiences. Airbnb, one of the most valuable private startups in the world, was valued at a high of $ 31 billion in a 2017 funding round. Airbnb was reportedly valued at $ 18 billion when it took out debt financing during the pandemic. The pandemic has rocked Airbnb’s business and many others the hosts who drive it. The company was hit hardest in March and April when it had more cancellations than bookings. At the beginning of May, the company cut 25% of its workforce or 1,900 employees. Chesky told CNN that the company “would give the people a total welcome” if it was able to, but added, “I want to see the storm develop further.”
Airbnb saw an improvement in bookings in the months that followed, as a result of using the platform for long-term stays as well as domestic and short-haul travel.
Then came another surge in coronavirus cases.
“Another wave of Covid-19 infections occurred in the fourth quarter of 2020. As a result, countries, especially in Europe, imposed strict bans. Similar to the first Covid-19 wave in March 2020, we see a decline in bookings in the most severe affected regions, “the company wrote in its prospectus.
Unlike many other highly valued startups, Airbnb previously said it was profitable in 2017 and 2018 with no spending. Like other sharing economy startups, Airbnb has fought a number of regulatory battles with local and state governments over the years over how this works in their jurisdictions. The problem remains an ongoing risk to his business.
In its filing, the company stated that it is “subject to a variety of complex, evolving, and sometimes inconsistent and ambiguous laws and regulations that may adversely affect our operations and discourage hosts and guests from using our platform and that could cause us.” . ” bear significant liabilities including fines and criminal penalties. “
Airbnb has also addressed the abuse of Airbnb rental properties for house parties. In August, she announced a worldwide ban on all parties and events on Airbnb offers, limiting occupancy to 16 people. Over the Halloween weekend, Airbnb banned entire house entries from being reserved for one night in the US and Canada to stop parties that could help spread the coronavirus. In some regions a variation of this is used for New Year’s Eve reservations.
During the pandemic, some cities took temporary action against short-term rents and the hosts were forced to postpone rents for 30 days or more.
While waiting for Airbnb stock to officially begin trading on Thursday, Chesky reminded CNN of advice given by former President Barack Obama, one of his many high-profile mentors.
According to Chesky, Obama said to him, “Before you go public, it is really important that you institutionalize your intentions so that as a public company you can minimize the conflict with your vision.” Chesky told CNN that it means “being really thoughtful about what kind of company we want to be”.