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Airbnb’s stock soared 135% shortly after its public debut, catapulting the home-rental company’s market valuation above $100 billion following a high-profile initial public offering.
The company had priced its IPO at $68 per share. But on Thursday, its stock opened on Nasdaq at $148 and then shot up to $160.
“In March and April, I didn’t think it was going to be possible to still go public this year,” said Nathan Blecharczyk, Airbnb cofounder and chief strategy officer. “But I think this pandemic has demonstrated how resilient the Airbnb business is.”
Airbnb plans to use the money raised to help it expand its home rentals and Experiences business, in which travelers link up with locals to do things like attend a cooking class, learn to surf, or take a tour. Prior to the pandemic, the company was considering expanding into other areas of travel, such as helping travelers with transportation and what to do after they arrive. Blecharczyk said that is still a long-term goal, but the company has shifted focus to its primary services.
Airbnb’s IPO comes during a rocky year for the travel industry. The company’s reservations slowed amid the pandemic, creating massive upheaval that had some people questioning whether the business could survive.
The IPO also comes a day after food delivery service DoorDash stock soared more than 80% during its debut on the New York Stock Exchange. On Wednesday, DoorDash’s shares had retreated 7% in midday trading.
But while DoorDash has seen a massive increase in customers during the pandemic, the story for Airbnb has been quite the opposite. During the second quarter, which was the height of the pandemic, Airbnb’s revenue dropped 72% year over year to $334.78 million, while its losses widened to $575.6 million.
But following some cost-cutting measures, including laying off 2,000 employees, slashing marketing, and reducing executive salaries, the company started to see some recovery in May. Airbnb reported a third-quarter profit of $219.3 million, which the company credited to customers booking rentals for local travel and remote work.
Looking ahead, Airbnb said it will explore how to leverage the increasing trend of nearby travel and remote work. Blecharczyk called it a “phenomenon” and said that the company plans to highlight more experiences and local stays on its app.
“That’s something we want to explore more fully,” Blecharczyk said. “Allowing people to use Airbnb not just when they’re traveling, but when they’re living their everyday life.”