Airbnb Inc (NASDAQ:ABNB) shares were pounced on by investors on the accommodation firm’s first day of trading on the Nasdaq on Thursday, sending the company’s stock price and market cap soaring despite its lossmaking status.

The group’s float, the largest to take place in the US this year, saw the stock surge past the US$68 initial public offering (IPO) price at which the firm sold shares to investors on Wednesday to close at US$144.71, giving it a market cap of over US$100bn. The IPO has also netted the company around US$3.5bn in cash.

The US$68 price tag was itself a significant rise from the range of US$44-US$50 that the company published last week and marks another episode in the ongoing surge of investor interest in tech firms over the year.

Airbnb‘s explosive entry onto the market followed a similar frenzy on Wednesday from food delivery group DoorDash Inc (NYSE:DASH), which saw its shares end its first trading day at around US$189, well above its already elevated IPO price of US$102. While the shares fell back slightly on Thursday, the company is still trading at around US$179 with a market cap of just over US$60bn.’s Neil Wilson said the surge of investor cash into Airbnb indicates a “strong fear of missing out” and that many are willing to “discard usual valuation sensibilities to get on board”.

Michael Hewson at CMC Markets was more critical of the frenzy, saying the reaction to the firm’s listing showed that the market “has clearly lost all sense of perspective”.

“This sort of valuation almost beggar’s belief, and even more so when you look at Airbnb’s finances. With revenues in 2019 of US$4.8bn, the company is unlikely to make anywhere near close to that this year, and will probably struggle to get near to that in 2021”, he said.

“As things stand the company is unlikely to turn a profit this year, and while it has plenty of cash to play with it is remarkable that anyone thinks that this sort of valuation is realistic in these uncertain times…Time will tell whether the current valuation of Airbnb is sustainable, or even realistic, (it isn’t) but unless the business can display anything like a level of long-term profitability the froth could well come off quite quickly”, Hewson added.

Airbnb shares were down 1.9% at US$142 in pre-market trading in New York on Friday.

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