Shares of Airbnb soared nearly 143% in its first day as a public company.
The stock opened at $146 and hit a high of $165. Shares recently changed hands around $150, up 120%.
At $165, Airbnb has a market capitalization of $114.8 billion.
The strong performance comes after Airbnb raised $3.5 billion late Wednesday. The home sharing network sold 51,551,723 Class A shares at $68 each. The $68 price is above the $56 to $60 price range the company set earlier this week, and higher than prior expectations of $44 to $50. Morgan Stanley and Goldman Sachs are lead underwriters on the deal, which includes 37 investment banks.
At $3.5 billion, Airbnbâ€™s IPO is the third largest offering this year, according to Dealogic. Itâ€™s also bigger than the $3.4 billion raised by DoorDash on Tuesday.
Airbnb opted not to have its executives ring the bell at the Nasdaq. The ceremony, which often features well-known CEOs of companies, typically provides a way for businesses to showcase themselves and their achievement. Airbnb instead provided a film of hosts from around the world ringing their doorbells to open the market.
Founded in 2008, Airbnb provides an online home sharing platform that lets consumers rent out their apartments or houses for short or long periods. The San Francisco start-up was hit hard by the Covid-19 pandemic, which caused demand for short-term rentals to dry up. That spurred Airbnb to shift its focus to longer-term residential listings in April.
This strategy appeared to have worked. Airbnbâ€™s business model rebounded as guests took trips closer to home and stays lengthened to more than just a few days. In the quarter ended Sept. 30, Airbnb had a profit of $219 million, even as revenue declined 18%. Costs and expenses fell 35% in the quarter, a prospectus said.
The Covid-19 pandemic has changed the landscape for travel in a positive way for Airbnb and the home sharing segment, according to Jared Shojaian, director and senior analyst, gaming & lodging, at Wolfe Research, who initiated Airbnb with an Outperform rating and a $135 year-end 2021 target.
Airbnb has performed better than other traditional accommodations partly because its model is ideal for social distancing, Shojaian said in a Dec. 9 note. He expects Airbnb to continue to gain new customers and grow their market share, which could stick in a post-Covid world.
â€œWe believe ABNB has secular growth and will take share from traditional accommodations over the long term (hotels and other rentals). We think COVID has increased that opportunity, and ABNB has meaningfully outperformed hotels YTD,â€ Shojaian said.
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