When the dust cleared on Thursday, there was clearly a new sheriff in town. Airbnb shares opened at $146, double its $68 IPO price and valuing the company at more than $100 billion, worth more than Marriott, Hilton and Hyatt combined.
The explosive success stunned most Wall Street analysts and may have caught the boss by surprise. Airbnb CEO Brian Chesky was shocked and said his home-rental company would not slow down.
“I’m very humbled by it,” Chesky told Bloomberg Television. “Today is a very special day for everyone, but the higher the stock price, the higher (the) expectations, the harder we’re going to be working, obviously.”
At the COVID-19 onset, Airbnb delayed its IPO as lockdowns affected millions of would-be travelers. The turn in fortune underscores the company’s ability to adjust during the pandemic, cutting costs and focusing more on long-term stays closer to home.
Airbnb shares that reached $165 on Thursday closed at $144.71, for a market cap of $86.5 billion. Travel giant Booking has a valuation of about $86 billion, while Expedia stands at more than $18 billion.
“For a mature company to see the valuation increase by (that much)] in a matter of nine months is incredible,” Jay Ritter, a University of Florida professor who specializes in IPOs, told CNN Business. The only downside, according to CNN Business, is Airbnb could have raised $4 billion more had it priced the shares at $146.
From the story: “The discrepancy may spark some soul searching at Morgan Stanley and Goldman Sachs, whose investment bankers led the offering. … It’s not just an Airbnb phenomenon, though. DoorDash opened at $182 per share earlier this week after having priced at $102 apiece. That means the company left more than $2 billion on the table.”