Biggest tech IPO of 2020: Airbnb shares skyrocket on debut

In its stock market debut, US-based Airbnb’s shares more than doubled, valuing the home rental business at just over $100 billion in 2020’s biggest US initial public offering (IPO) and capping a bumper year in which investors flocked to tech stocks.

Airbnb launched on the Nasdaq, the American stock exchange, at $146, well above the $68 per share IPO price that raised $3.5 billion for the venture. The stock reached a high of $165 and closed at $144.71.

After the company’s business was severely impaired by the COVID-19 pandemic earlier this year the IPO is the outcome of a remarkable turnaround in Airbnb’s fortunes.

As lockdowns eased, more travelers chose to book homes instead of hotels, helping Airbnb report a surprise profit for the third quarter. The business also benefited from increased demand in renting homes away from major cities.

“I don’t think this summer too many people expected to see an Airbnb IPO this year. We were planning on going public, we put our IPO on hold and this has been the most unbelievable journey. It’s been quite a comeback for our hosts and for what I hope will be travel.”

Mr. Chesky’s Airbnb stake is now worth around $11 billion.

Established in 2008 as a platform for conference room bookings, the listing of Airbnb was one of the most awaited US IPOs in 2020, which has already been a record year for listings on the stock market.

Airbnb had a market capitalization of $86.5 billion at the start of trading on the Nasdaq, eclipsing that of online travel agency Booking Holdings and hotel chain Marriott International.

Airbnb’s completely diluted valuation came to $100.7 billion, including shares such as options and restricted stock units, more than five times the $18 billion Airbnb was valued at the beginning of the pandemic in a private fundraising round in April. In its last pre-COVID-19 private fundraising in 2017, Airbnb’s value was estimated at $31 billion.

The eye-popping rise in Airbnb’s stock on its debut comes just a day after the share price of American food delivery company DoorDash doubled in their first day of trading.

Mr. Chesky said Airbnb would focus on the things that were within the company’s control. “At this point the price of stock is not something we control. I’ve encouraged our employees to focus on things they can control,” Mr. Chesky said, speaking before the stock had started trading.