Airbnb valuation surges past US$100 billion in biggest US IPO of 2020

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NEW YORK (REUTERS) - Shares of Airbnb soared in their stock market debut on Thursday (Dec 10), valuing the home rental firm at US$101.6 billion (S$135.7 billion) in the biggest US flotation of 2020 and capping a bumper year that saw investors flock to tech darlings.

Shares opened at US$146 on the Nasdaq, far above the initial public offering (IPO) price of US$68 apiece that raised US$3.5 billion for the company. The stock hit a high of US$165, rising 142.6 per cent after the debut.

The IPO highlights a stunning recovery in Airbnb's fortunes after the firm's business was heavily damaged by the Covid-19 pandemic earlier this year.

Founded in 2008 as a website to take bookings for rooms during conferences, Airbnb was valued at just US$18 billion in a private fund-raising round in April and US$31 billion in its last pre-Covid-19 private fund-raising in 2017.

The surge at opening adds billions to what was already a blockbuster payday for founders Brian Chesky, Nathan Blecharczyk and Joseph Gebbia and investors including Sequoia Capital and Peter Thiel's Founders Fund.

This year has seen a string of stellar debuts by technology startups including Wednesday's launch of DoorDash, which valued the food delivery company at more than four times the figure from a private fundraising round six months ago.

At US$146, Airbnb had a market capitalisation of about US$87.2 billion, compared with Booking Holdings' US$86.3 billion and Marriot International's US$42.3 billion.

Airbnb struggled in the immediate aftermath of the pandemic as travel came to a grinding halt. It had to lay off a quarter of its workforce and seek US$2 billion in emergency funding from investors, including Silver Lake and Sixth Street Partners.

But as lockdowns eased, more travellers opted to book homes instead of hotels, helping Airbnb post a surprise profit for the third quarter. The San Francisco-based firm also gained from increased interest in renting homes away from major cities.

Airbnb's listing is one of the most anticipated US IPOs of 2020, which has already been a bumper year for flotations.

Record label Warner Music Group, data analytics firm Palantir Technologies and data warehouse company Snowflake Inc have all gone public in the past few months.

Including securities such as options and restricted stock units, its fully diluted valuation came to US$101.6 billion.

Morgan Stanley and Goldman Sachs are the lead underwriters for the IPO.

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