Airbnb seeks up to $35B valuation ahead of IPO

In an updated regulatory filing on Tuesday, Airbnb updated said that it’s setting a price range of $44 to $50 for its upcoming initial public offering, which would raise up to $2.6 billion and value the company at roughly $35 billion. Yahoo Finance’s Emily McCormick breaks down the details.

Video Transcript

MYLES UDLAND: There's been some highly anticipated upcoming IPOs. We now have more data on Airbnb's potential pricing. And Yahoo Finance's Emily McCormick joins us now with the details. Emily.

EMILY MCCORMICK: Miles, Airbnb is looking like it will be going public at a premium to its last private valuation. Now, the company is saying in an updated filing this morning that it plans to offer 51.9 million shares in its IPO and price these at between $44.50 and $50 per share. Now, this would mean that the IPO would raise about $2.6 billion at the high end and give the company a valuation of as much as about $35 billion on a fully diluted basis.

Now, compare that to the last private valuation for this company. That was reportedly around $18 billion earlier this year after it raised $2 billion in debt to help to get through the coronavirus pandemic. Of course, that pandemic hitting demand here for Airbnb and other lodging companies. Now, the company is also set to list on the NASDAQ under the ticker ABNB, so a couple other details that we got out from this filing this morning. And the company's roadshow during which the company will be actually pitching its IPO to investors is set to kick off later today, so that means the IPO will likely take place in the middle of this month.

Now, Airbnb is going public here during a strong period for the markets, and of course, for newly public companies overall if we think about the reception that we saw for some of these other companies like Lemonade, Snowflake, these tech companies all really rising on the heels of their own public offerings. But at the same time, we do have to highlight here that Airbnb has really taken a hit to its business due to the pandemic. Its revenue dropped 32% to $2.5 billion in the first nine months of this year over 2019, and that top-line decline really did actually improve a bit during the third quarter. But again, still seeing those big declines over last year.

Now, one of the things that I really noticed here in this prospectus, which had been released earlier on in November, is that the company did highlight as a risk factor that it cannot predict if and when demand will return to pre-pandemic levels, even after restrictions are lifted. So ultimately, we'll have to see how this roadshow shapes up. And Airbnb's ultimate IPO size could, of course, change depending on what demand looks like during that. But for now, it's seeing a pretty high valuation, at least being implied here based on today's filing, Miles.

MYLES UDLAND: And you look at the travel stocks this morning, Emily. Airlines are higher, And the OTAs, which are really the purest competitor to Airbnb, those stocks are higher as well. So amazing run we've seen from Airbnb, essentially doubling its value since March. Emily, thanks so much.