Shares of the short-term rental company Airbnb have skyrocketed by 120 percent in its first day of trading, launching the company’s market cap to more than five times its last private market valuation. The massive IPO has resulted in Airbnb being worth more than the combined values of Marriott International, Hilton Worldwide, and Hyatt Hotels, the three largest hotel chains.
Forbes reports that just one day after the food delivery service DoorDash’s massive public market launch, shares for the rental company Airbnb have skyrocketed by 120 percent during the company’s first day of trading. The surge in stock price has launched the company’s market cap to more than five times its last private market valuation despite the coronavirus pandemic limiting travel and holiday rentals.
After years of shying away from publicly listing Airbnb’s shares, choosing VC funding over public cash, Airbnb CEO Brian Chesky finally gave in to pressure from investors in 2019, saying that the firm would go public sometime in 2020. Some speculated that Airbnb could pull their plans to go public after the coronavirus pandemic had a major impact on the travel industry, but Chesky reportedly signed off on the IPO in late July.
When Airbnb filed to go public in November, the company revealed a surprise profit of $219 million in the third quarter although it has still never turned an annual profit. Airbnb was founded by Chesky alongside Nathan Blecharczyk and Joe Gebbia in August 2008, all three are now billionaires.
The consumer-spending data firm Cardify in a pre-IPO report stated: “While Airbnb has recovered from the gut-punch of the pandemic’s early days, the trendline is turning negative: The platform has seen a decrease in both user acquisition and order frequency since July 2020 and is further being pulled down by a shrinking lodging sector. However, Airbnb remains a strong player in the weakened sector, seeing a growing share of the market as traditional hotel chains struggle to stay afloat.”
Airbnb’s debut market capitalization is more than those of the largest U.S. hotel chains combined. On Thursday, Marriott International, Hilton Worldwide, and Hyatt Hotels reported respective market caps of $43 billion, $39 billion, and $8 billion.