DIGITAL BUSINESS

When was Airbnb’s IPO?

Airbnb's IPO took place on Dec. 9, and its shares began tradingon Dec. 10. The company had initially announced its plans to gopublic in September, following a number of big debuts by techcompanies like Zoom, Pinterest, Uber, Lyft.

What were the IPO shares priced at?

Airbnb began selling 50 million shares at a reported price of$68 each, valuing the company at $47 billion. That's up fromthe price range it had previously set of $56 to $60, which would'vevalued the company at up to $42 billion. Based on strong investorappetite, the company raised the initial price range of $44 to$50.

When Airbnb's stock debuted on the Nasdaq, it was at $148 pershare and then jumped to $160—representing a 135% increase from itsIPO. That gives the company a valuation of $100 billion.

In August 2021, however, Airbnb reported itstoo-good-to-be-true quarterly earnings. Unfortunately for thetravel industry, Airbnb’s financial crystal ball looks hazy thanksto the COVID-19 Delta variant. Indeed, Wall Street has beenpunishing Airbnb over the past few days even after the onlinerental company reported jaw-dropping results, including a 300%year-over-year increase of sales to $1.34 billion. During a callwith analysts, CEO Brian Chesky doubled down on the company’s salesgrowth, projecting that the company’s next quarter will be “ourstrongest revenue quarter ever,” which “speaks to the inherentresiliency of our business.”

Investors, however, were spooked by what Airbnb revealed ina letter to shareholders, in which the company said thatthe “COVID-19 pandemic creates ongoing uncertainty for our futureresults.” In other words, while people may be traveling into thenext quarter, any future vacation or work-travel plans may be puton hold as the Delta variant spreads.

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QUESTIONS:

1. Explain Airbnb’s business model.

2. How has Airbnb evolved over the years?

3. Why and how was it possible for Airbnb to have a successfulIPO during the pandemic? If it has anything to do with investorsentiments, what did Airbnb do right during the pandemic?

4. What are the challenges ahead for the company?

5. What will be the future of Airbnb?