Airbnb (ABNB) IPO Opens 115% Higher

Today's IPO for Airbnb Inc. (NASDAQ: ABNB) opened for trading at $146 after pricing 50,000,000 shares of which are being sold by Airbnb and 1,323,531 shares of which are being sold by certain selling stockholders, at a public offering price of $68 per share, above the expected $56-$60 range.

Morgan Stanley, Goldman Sachs & Co. LLC and Allen & Company LLC are acting as lead book-running managers for the offering. BofA Securities, Barclays and Citigroup are acting as book-running managers. BNP PARIBAS, Mizuho Securities, Credit Suisse, Deutsche Bank Securities, Jefferies and Wells Fargo Securities are acting as joint book-running managers. Baird, Canaccord Genuity, Cowen, D.A. Davidson & Co., JMP Securities, KeyBanc Capital Markets, Needham & Company, Oppenheimer & Co., Piper Sandler, Raymond James, Stifel, Wedbush Securities, William Blair, Academy Securities, Blaylock Van, LLC, CastleOak Securities, L.P., C.L. King & Associates, Guzman & Company, Loop Capital Markets, MFR Securities, Inc., Mischler Financial Group, Inc., Ramirez & Co., Inc., Siebert Williams Shank, Telsey Advisory Group and Tigress Financial Partners are acting as co-managers for the offering.

Airbnb provides an opportunity for hosts to rent their houses, apartments, cottages, etc. to guests. In 2019, 54 million active bookers worldwide booked 327 million nights and experiences on the company's platform, and since its founding, there have been over 825 million guest arrivals on Airbnb.

The company estimates their serviceable addressable market (“SAM”) today to be $1.5 trillion, including $1.2 trillion for short-term stays and $239 billion for experiences. They estimate their total addressable market (“TAM”) 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.

COVID-19 has had a materially negative impact on Airbnb. Gross nights and experiences booked materially contracted on a year-over-year basis, with a low in April 2020, down 72% year over year. From April through June 2020, they saw a steady rebound in gross nights and experiences booked before cancellations and alterations, which were down 21% in June relative to the same period in the prior year. From July through September 2020, gross nights and experiences booked have been stable, down approximately 20% relative to the same period in the prior year.

The company has incurred net losses in each year since its inception. The company incurred net losses of $70.0 million, $16.9 million, $674.3 million, and $696.9 million for the years ended December 31, 2017, 2018, and 2019, and nine months ended September 30, 2020, respectively.

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