Airbnb targets as much as $33B valuation for IPO

Range is higher than expected, showing its strength in the pandemic market

Airbnb CEO Brian Chesky (Getty; iStock)
Airbnb CEO Brian Chesky (Getty; iStock)

Airbnb executives plan to target a higher-than-expected valuation range of as much as $33 billion for its initial public offering, which is expected sometime next month.

On Tuesday, the company will start marketing its offering to mutual funds and hedge funds, the Wall Street Journal reported. The investor roadshow will take place via Zoom meetings, rather than the usual meetings across the nation.

Companies and their underwriters typically set a relatively conservative initial offering range, leaving some room to improve before trading starts. But in the case of Airbnb, the initial range is higher than expected. People close to the company’s offering thought the offering would be $30 billion, according to the publication.

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The higher-than-expected pricing may be a reflection of the short-term rental company’s rebound from the early days of the pandemic.

At the onset of the pandemic, people stopped traveling, and Airbnb’s valuation took a nosedive to $18 billion from the $31 billion mark set in a 2017 investment round. Bookings at Airbnb rebounded by summer as people preferred to stay in short-term rentals rather than hotels.

But the pandemic still pummeled the company’s finances: According to its S-1 prospectus, filed in November, bookings totaled $18 billion as of Sept. 30, a 39 percent year-over-year drop. Revenue for that period dropped 32 percent, to $2.5 billion.

Airbnb and its underwriter will set the final IPO price based on feedback from investors in the virtual roadshow. Morgan Stanley and Goldman Sachs are leading Airbnb’s IPO.

[WSJ] — Akiko Matsuda