Airbnb Inc. priced its initial public offering at $68 a share, well above an already raised target range of $56 to $60 a share, according to published reports late Wednesday.
The pricing valued Airbnb at around $47 billion The Wall Street Journal reported, citing people familiar with the situation. The offering had been set to raise around $3.7 billion.
Airbnb has seen its business hammered by the coronavirus pandemic, as have all travel-related companies. However, with the onset of vaccinations against the virus, hopes for an improved travel market in 2021 are on the rise. Airbnb connects travelers with people renting out their personal homes.
On Monday, Airbnb had boosted the price range of its initial public offering to between $56 and $60 a share.
Airbnb 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.
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, as reported in Airbnb’s IPO prospectus.
Earlier this week Jim Cramer said he likes the company’s prospects, but said investors should be cautious in the early going.
“If you can get the stock for $68 or less this week, I’d back up the truck. If you can get it for less than $85, I’m granting you a small position,” Cramer told CNBC viewers. “Any higher, though, and I’m going to have to say you’ve got to keep your bat on your shoulder and wait for a better pitch.”
The home-rental company is the latest to join the red-hot market for IPOs that has seen prices well above target ranges and enormous gains in first day trading. Door Dash (DASH) - Get DoorDash, Inc. Class A Report ended its first day of trading Wednesday up 86% from its raised offering price of $102. C3.ai (AI) - Get C3.ai, Inc. Class A Report shares gained 120% in their first day of trading Wednesday, ending up $50.49 at $92.49.
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.