What’s going on?

Airbnb finally moved onto the stock market and its shares initially more than doubled.

What does this mean?

• Although the pandemic has made life difficult for Airbnb, but it surprised everyone by actually turning a profit, thanks to the trend of day trips.
• Airbnb thought it was about time to go public given that some of its employees’ options were set to expire by the end of 2020.
• Airbnb raised $3.4 billion from the IPO, setting the overall valuation at $47 billion. This then becomes one of the biggest US IPOs of the year and marks a massive step up from the $18 billion-valuation in April.

Why should I care?

For markets: Investors’ confidence in recovery

• Airbnb’s share price went up twice ahead of its IPO, which is a sign that investors are confident both in the company and in the travel industry’s eventual recovery.
• That confidence could now spill over into other travel companies like Booking.com and Expedia – especially since their shares are looking cheaper than Airbnb’s.

The bigger picture: Watch out for regulations

The sharing economy is facing more scrutiny:

• E.g: the UK government announced it’s going to start being stricter about taxing Airbnb’s landlords.

Content source: Finimize. (2020) Home Sweet Home. Available at: https://www.finimize.com/wp/news/home-sweet-home/ [Accessed on December 23, 2020]