In can only be described as a power move, Airbnb is planning on targeting a higher valuation range than what investors were previously expecting– a total that could reach as high as $33 billion for its long-awaited IPO.
As the short-term rental hosting platform searches for mutual and hedge funds to invest in the IPO, it will be holding a number of Zoom meetings for investors to bring in the needed capital within the next month.
The risk here is obvious. Its high valuation target is rare. Most companies ask for more modest offering ranges to leave room to improve before the trading phase begins.
So why the risk? Airbnb saw declines in user traffic, revenue, and inventory due to the Covid crisis. Many, our publication included, expected the company to continue this downward spiral as the market was expected to also take a nosedive. Fortunately for the platform, and though it did see downturns in numbers, it has since bounced back.
Investors are still wary. In the Polish market, 6,000 apartments were taken out of Airbnb’s inventory as those opted to stay home and out of public during the pandemic. It will be stories like this that will be road bumps in the way of Airbnb’s public status and whether its stocks can reflect its outrageous valuation.