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Summary
- Airbnb stocks have fallen by over 10 per cent since debuting on the stock markets last week.
- The overwhelming response to its stock market debut saw Airbnb’s share trading open at US$ 146 per stock and hit an intraday high of US$ 165 on December 10.
- The unicorn was valued at more than US$ 100 billion following its IPO.
- Riddled by pandemic-triggered challenges, Airbnb Inc recorded a 32 per cent year-over-year decline in its revenue of US$ 2.5 billion in the first nine months of
After debuting with a bang on Wall Street earlier in December, stocks of Airbnb Inc (NASDAQ: ABNB, ABNB:US) came down crashing this week.
Since opening trade at a price of around US$ 146 on Thursday, December 10, Airbnb stocks have fallen by over 10 per cent. On Monday, December 14, the stocks closed trading at US$ 130.
Airbnb’s business model is reliant on travel and tourism, which is one of the worst-impacted sectors amid the coronavirus pandemic. Hence, the stocks crashing this week is a sign of price correction, opine some market analysts.
Airbnb’s Grand IPO Before Slump
Online rental place provider Airbnb Inc’s business had a tough time this year with COVID-triggered travel bans and lockdown restrictions. But when the San Francisco-based company announced earlier in 2020 its plans to go public, the news met with quite a fervor.
Airbnb, on December 1, announced that it is pricing its shares at US$ 44 to US$ 50 apiece for its initial public offering (IPO), which would raise a market cap of up to US$ 34.8 billion. Then, a day before its trading debut, the company increased its share price to USD 68 apiece, taking its value up to US$ 47 billion on a fully-diluted basis.
When Airbnb shares finally started trading at the NASDAQ Stock Market under the ticker of 'ABNB' on December 10, the overwhelming response to its stock market debut saw trading open at US$ 146 per share and hit an intraday high of US$ 165.
The unicorn went on to raise a valuation of more than US$ 100 billion following its IPO.
© Kalkine Group Image
Airbnb’s public listing came a day after the blockbuster debut of food delivery company DoorDash Inc (NASDAQ:DASH), which raised a capital of about US$ 3.37 billion from its IPO earlier this month.
Airbnb Latest Financial Reports
Airbnb Inc recorded a decline of 32 per cent year-over-year (YoY) in its revenue of about US$ 2.5 billion in the nine months ending 30 September 2020.
The company also posted a loss of US$ 696.9 million and an adjusted EBIDTA of US$ 230.2 million in the latest nine-month period.
Airbnb’s lowered revenue and substantial loss was driven primarily by the drop in bookings and the various other business and financial blows the company suffered due to the pandemic. And considering that the outbreak is stick kicking and alive, the disruption to its operations in the near future is quite likely.
The home rental firm put up nearly 52 million shares at its IPO in order to adjust some of the losses incurred during the pandemic.
In other cost control measures, Airbnb cut down about 25 per cent of its workforce so far this year and raised around US$ 2 billion from its investors in emergency funding.
