Finally much anticipated initial public offering of vacation rental online market place Airbnb happened on December 9 with the company pricing its share at a higher price than earlier issued price range.
In the IPO Airbnb sold its shares at $68 per share, the company had earlier issued a price range of $44 to $50 per share thereafter revising up the range to $56 to $60 a piece.
The company issued 51.5 million shares in the IPO giving the company a market capitalization of about $3.5 billion. The IPO leaves Airbnb with a diluted valuation inclusive of options and restricted stock units totaling to $47.3 billion.
According to regulatory filings Airbnb goes down as the biggest IPO by a U.S based company in 2020.
This IPO will give the company much needed help at a time when it had been recording deep drops in booking and a significant increase in cancellations due to the coronavirus pandemic which has engulfed the entire world for over nine months now.
Due to declining revenue and cash reserves, back in April Airbnb was forced to tap into a $1 billion investment from private equity firms Sixth Street Partners and Silver Lake to boost its financial outlook.
After the April investment Airbnb had a market valuation of $18 billion which was still way lower compared to the $26 billion valuation the company had in March before the pandemic spread across the world.
Goldman Sachs Group Inc. (GS) and Morgan Stanley (MS) were the leading underwriters for Airbnb in the IPO. Stock of the company will start trading on Nsadaq on December 10 under the ticker ‘ABNB’.