Airbnb decimated by COVID yet most popular IPO of 2020.

Joshua Fraser Jan 5th, 2021 / Industry Insights, Airbnb, Covid

Airbnb was on a wild ride in 2020. They had announced an IPO in the beginning of the year but a global pandemic decimated the travel industry in March.

Airbnb reported revenues of $335 million in Q2 2020 which is down 67% from over $1 billion which was reported Q2 2019. Additionally, think about the comparison to $842 million in sales reported in Q1 2020. This isn’t even the worst news, Q1 2020 they lost $341 million and the stinger in Q2 was $400 million. They cut 25% of staff, over 2000 employees, decreased executive compensation and raised $1 billion dollars at a valuation of $18 billion, remember this number.

In Q3, they turned things around and started to see bookings and traffic increase rapidly. The q3 revenue rebounded to $1.34 billion and the rumor mill started on when would Airbnb announce the IPO? Reuters reported it in October that the raise would be around $3 billion at a $30 billion valuation. This was in October.

They initial public offering was set for December 9th and Airbnb plans to list on the NASDAQ under the symbol ABNB. One the first day of trading, the stock debuted at $148 per share and jumped to over $160 which is a 135% increase from the IPO. This makes the company worth over $100 billion dollars. The CEO Brian Chesky was speechless when he heard this on National television. Its an impressive feat but they left billions of dollars on the table pricing so low. After 12 long years, the CEO is now worth over $11 billion and this will be one of the best stories to come out of 2020.

With all this being said, a $100 billion dollar valuation with a revenues of ~$4 billion a year is a 25x multiple. Many analysts and experienced investors have predicted this is an inflated valuation but it’s stayed consistent into January and we can’t wait to see what the year has to bring.

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