Airbnb has capped a wild year with a smash hit market debut. The home rental pioneer’s stock opened at $146 on its first day of trading on the Nasdaq. This is more than twice the initial public offering price of $68 a share and far above the original range of $44 to $50 per share set by the company last week.
At $146 per share, Airbnb’s implied market capitalisation of more than $87bn makes it more valuable than leading online travel website Booking.com. This is quite a feat considering Booking pulled in three times more revenue and made a hefty $4.86bn in net profits last year, against Airbnb’s $674m in net losses.
Travel trends are on Airbnb’s side. The lengthy rollout of Covid-19 vaccines means in the short-term travel will continue to be marked by limited mobility. Persistent wariness over crowded hotels and planes will benefit home-rental websites such as Airbnb. So will the company’s exposure to holidaymakers rather than to business travellers. Its geographical spread — none of its top 10 cities made up more than 2.5 per cent of revenues or 1.5 per cent of listings — is another plus.