Airbnb (ABNB) - Get Report is expected to boost the price range of its initial public offering as the online home-rental platform looks to take advantage of what has been a hot IPO market this year - even as the coronavirus has slammed global business and leisure travel.
Citing people familiar with the matter, The Wall Street Journal reported that Airbnb was considering lifting the range to between $56 and $60 a share from $44 to $50. The new range would give the company a valuation of as much as $42 billion.
The IPO follows a tumultuous year for Airbnb, which lost $697 million over the first nine months of 2020, with revenue down by almost a third as the pandemic and abrupt halt in business and leisure travel slammed its business.
At the same time it comes amid a hot year for IPOs in general as companies scramble to take advantage of record-low borrowing costs and a hot stock market - as well as a rebound in the broader economy and travel.
Airbnb's September quarter revenue was $1.3 billion as travel restrictions eased and users began booking on its platform again. Revenue dropped 18% from last year but was still a notable improvement.
Indeed, a flurry of IPOs are expected this month, typically a quiet month for IPOs, including food-delivery company DoorDash (DASH) - Get Report, virtual building video game giant Roblox and ContextLogic, the parent of online retailer Wish.
More than $140 billion has been raised in IPOs on U.S. exchanges so far this year, well above the previous full-year record set in 1999. Airbnb in September 2019 said it planned to list its shares in 2020, but kept quiet about the plans until more recently.
DoorDash also plans to lift its IPO price range to as high as $95 a share, up from between $75 and $85, giving it a valuation of as much as $36 billion. DoorDash is expected to make its public debut Wednesday, the day before Airbnb.
Both Airbnb and DoorDash and their respective underwriters will set their final IPO prices in the coming days. Morgan Stanley and Goldman Sachs are leading Airbnb's IPO, while Goldman and JPMorgan Chase are leading DoorDash's.