In an amended filing with the U.S. Securities and Exchange Commission (SEC) Tuesday, Airbnb announced a price range of $44 to $50 per Class A share for an initial public offering (IPO) of 50 million shares. Selling shareholders are selling 1.9 million of those shares, and the underwriters of the IPO have a 30-day option on another 5 million shares.
Airbnb expects net proceeds of around $2.3 billion, assuming a per share IPO price of $47. Each dollar above or below that level would add or subtract $48.9 million from the proceeds to the company.
Including 400,000 shares of Class A stock the company plans to donate to a charitable foundation, Airbnb’s valuation at $50 a share totals nearly $35 billion.
According to Crunchbase, Airbnb has raised $6.4 billion in venture funding through June of 2020. At the time, the company was valued at around $18 billion, far below its $31 billion valuation in 2017.
In its November 16 SEC filing, Airbnb estimated its serviceable addressable market to be $1.5 trillion, including $1.2 trillion for short-term stays and $239 billion for experiences. The firm also estimated the total addressable market to be $3.4 trillion, including $1.8 trillion for short-term stays, $210 billion for long-term stays and $1.4 trillion for experiences.
Airbnb reported revenues of $2.56 billion, $3.65 billion and $4.81 billion for 2017, 2018 and 2019, respectively. During that time, the company posted net losses of $70.05 million, $16.86 million and $674.34 million, respectively.
In the third quarter of this year, the company reported net income of $219 million on revenue of $1.34 billion, a decline of around 19% year over year, but a solid recovery from sharp drops related to the COVID-19 pandemic. Gross booking value has risen from a year-over-year decline of 64% in April to a gain of 35% in September.
Getting an IPO done right now makes a lot of sense. There’s a lot of cash sloshing around in the market, just looking for a home. Airbnb has plenty of those.
As for that $35 billion valuation, IPO investors undoubtedly will validate it. What happens to the shares over the next month or so is more likely to tell the full story on valuation.
24/7 Wall St.Are You Ahead, or Behind on Retirement? (sponsor)
If you’re one of the over 4 Million Americans set to retire this year, you may want to pay attention.
Finding a financial advisor who puts your interest first can be the difference between a rich retirement and barely getting by, and today it’s easier than ever. SmartAsset’s free tool matches you with up to three fiduciary financial advisors that serve your area in minutes. Each advisor has been carefully vetted, and must act in your best interests. Start your search now.
Don’t waste another minute; get started right here and help your retirement dreams become a retirement reality.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
Our expert who first called NVIDIA in 2009 is predicting 2025 will see a historic AI breakthrough.
You can follow him investing $500,000 of his own money on our top AI stocks for free.