Airbnb targets $35bn float as it rides tech wave

Airbnb is planning to raise as much as $2.6bn (£1.95bn) in a long-awaited float as it brings one of the busiest years ever for the US stock market to a close with a flurry of listings. 

The home-renting business, which suffered at the start of the coronavirus pandemic after a collapse in travel, has come back strongly as staycations picked up again even as major hotel chains continued to suffer.

Airbnb is targeting a $35bn valuation in the float, higher than the $18bn it raised at earlier this year. It will sell around 52 million shares at $44 to $50, according to a US filing with the Securities Exchange Commission. 

The rental business, founded by Brian Chesky in 2008, saw its valuation slashed from $31bn earlier this year as it raised $2bn in debt and other financing as it sought to stay afloat during the pandemic.

Despite the lofty valuation, Airbnb is still losing hundreds of millions of dollars each year. After the first peak of coronavirus, it reported a second quarter loss of $576m as the travel industry collapsed. But investors see Airbnb as a potential post coronavirus winner, positioned to pick up where the global hotels sector crumbled after coronavirus.

It has lost $1.7bn over the last three years. In the first nine months of 2020, it made $2.5bn in revenues, around 32pc down on the previous year. 

The company’s final valuation could still change based on an investor roadshow over the coming days.

Airbnb is planning to price the float on December 9 and for its shares to begin trading on the Nasdaq the following day, according to Bloomberg.

December is packed with US listings in a year which, despite the shock of the pandemic on trading, has seen the US markets surge on the back of technology stocks.

While the bankers’ calendars for floats dried up in March, they have since rebounded and around $100bn-worth of companies are due to go public this month. 

They include food delivery service DoorDash, video-game company Roblox and the expected $30bn float of discount Amazon rival Wish.com.

Airbnb’s current investors will maintain outsized control of the company, thanks to B class shares that are worth 20 votes compared to those being sold in the float. Its backers include Sequoia, Founders Fund and Yuri Milner’s DST Global. 

New listings in the US have raised $152bn this year, according to Bloomberg data. The total raised worldwide in 2020 of $317bn is second only to 2007. 

Morgan Stanley and Goldman Sachs are leading Airbnb’s offering. Allen & Co., Bank of America, Barclays and Citigroup are also listed as underwriters. Airbnb plans for its shares to trade on under the symbol ABNB.