Big demand for Airbnb shares
Shares in holiday booking platform Airbnb surged on their first day of public trade on Thursday, giving the firm a valuation of more than $100bn.
The massive listing – the biggest of the year in the US – raised $3.5bn (£2.6bn) for the firm.
The firm said it would use the money to help it survive the pandemic, which has devastated travel.
The flotation comes as investor appetite for tech firms has sent US markets soaring.
Demand for Airbnb shares was so hot, prices in opening trade more than doubled from the $68 apiece fetched ahead of the listing. That figure was already more than the firm had initially targeted.
Chief executive Brian Chesky told the BBC the firm planned to use the unexpectedly large windfall to help navigate the crisis.
“We are still in a storm,” he said. “We don’t know how long the storm is going to last so we hope for the best but we plan for the worst.”
“We’re going to be very prudent and very thoughtful about our investment, especially in a world of a huge amount of uncertainty, which is clearly where we still are right now,” he added.
Airbnb bookings crashed this spring, forcing it to slash staff numbers by 25% and raise $2bn in emergency funds.
Last month, the firm said travel had returned somewhat over the summer, as people looked to escape locked down cities with long-term rentals within driving distance. The company reported a surprise profit for the July, August and September months.
But the firm has warned that renewed lockdowns in many places will weigh on recovery.
Russ Mould, investment director at AJ Bell, said the money Airbnb raised despite the turmoil was a sign of hope that the travel industry will rebound quickly.
“Investors are clearly looking to [Airbnb] for a company that is a long term disruptor but at the same time a short-term winner if and when people start to travel in greater numbers in 2021,” he said.
He added: “You’ve also got very, very enthusiastic stock markets right now… Some people think they may be running a little bit too hot but we shall find out.”
More companies have raised more money by floating on US exchanges this year than any year since 2014, according to Renaissance Capital, a Connecticut-based firm that offers investments focused on initial public offerings. (BBC)