It’s been a long time coming. Speculation over Airbnb’s initial public offering has been in the works for at least half a decade. Now the short-term home rental company plans to make its debut on Wall Street on Thursday, reportedly pricing its shares at $68 apiece, according to the Wall Street Journal.
That’s far more than the $44 to $50 per share target range it initially set earlier this month and reportedly values the company at around $47 billion. Earlier this year, Airbnb was privately valued at about $18 billion.
Unlike many other Silicon Valley startups, Airbnb has periodically shown it can turn a profit. That has impressed investors who are betting the San Francisco-based tech company can make its mark on the travel industry. In just over a decade, Airbnb has gone from a website accommodating couch surfers to one that has a massive online presence. It now lists millions of homes for rent in nearly every country on Earth.
While Airbnb’s start as a publicly traded company looks bright, its business has taken a hit from the novel coronavirus pandemic. Tourists and travelers around the world have largely stayed close to home and followed shelter-in-place mandates, meaning fewer bookings for the company.
“Our financial results for the first nine months of 2020 were materially adversely affected,” Airbnb wrote in a November filing with the US Securities and Exchange Commission. “We expect that COVID-19 will continue to materially adversely impact our bookings, revenue and business operations in future periods.”
Airbnb said bookings on its platform fell by 72% in April from the year before. But, in June through September, the company said it began to see a rebound with bookings down around 20% from the year prior. To mitigate those losses, Airbnb laid off 1,900 employees, about 25% of its staff, in May. It also raised $2 billion in debt funding in April.
It’s also been a bumpy road for the company on the regulatory front. Airbnb has seen scrutiny from lawmakers and faced battles with local governments from San Francisco to New York to London. They say the company is at least partially responsible for rising rents and displacing long-term tenants. Though Airbnb has worked out deals with regulators in many cities, it’s had to scale back its offerings and adjust to new rules.
“We are subject to a wide variety of complex, evolving, and sometimes inconsistent and ambiguous laws and regulations,” Airbnb wrote in its November filing. “And that could cause us to incur significant liabilities including fines and criminal penalties.”
Airbnb has also had to work to stay competitive with hotels and similar sites like VRBO vacation rentals. Over the past couple of years, it’s expanded its business from just short-term home rentals to letting travelers book day trips and restaurant reservations. It’s also partnered with major landlords in California, Florida and New York that allow for Airbnb rentals through their buildings — although some of those deals have fallen through.
Airbnb plans to trade on the Nasdaq under the symbol ABNB. Morgan Stanley and Goldman Sachs are leading its IPO.