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Airbnb chooses IPO venue in big win for Nasdaq over NYSE

In biggest listing for the stock exchange since that of Facebook in 2012.

Airbnb has chosen to list its shares on the Nasdaq Global Select Market, its biggest initial public offering since Facebook in 2012.

The home-rental company didn’t disclose any further details of its listing plans in a statement Tuesday.

Nasdaq has a reputation for technology-focused stocks such as software and biotechnology, including high-profile IPOs such as those for Lyft Inc. and Zoom Video Communications. Yet, since the fallout surrounding Facebook’s difficult debut, it has frequently lost the competition for mega IPOs to the New York Stock Exchange, including Uber’s $8.1 billion listing last year and Snowflake’s $3.86 billion offering.

A representative for Airbnb declined to comment beyond the statement.

Airbnb said in August that it had filed confidentially with the US Securities and Exchange Commission for an IPO. The company will seek to raise as much as $3 billion in an IPO before the end of the year, people familiar with the matter have said.

At that price, Airbnb’s offering would be the third-biggest on Nasdaq, topped only by Facebook’s $16 billion IPO in 2012 and Mondelez International’s $8.68 billion listing in 2001. By comparison, the New York Stock Exchange has been the venue for at least 23 IPOs exceeding $3 billion, according to data compiled by Bloomberg.

Valuation flux

Airbnb was valued at $18 billion in April when it raised $2 billion in debt from investors at the depth of the pandemic. That was a significant drop from its earlier peak valuation of $31 billion in a 2017 fundraising round.

San Francisco-based Airbnb told shareholders in an email that it was splitting its privately held shares this week, a move that lowers its stock price per share, Bloomberg reported. The value of the shares has climbed 10.4% from its last valuation listed in compensation reports to the Internal Revenue Service, according to the email. A person familiar with the matter said the increase was from the end of the second quarter.

After the split, the company’s common shares were valued at $34.88 apiece as of Sept. 30, according to the email. That value is calculated for tax purposes related to employee compensation.

At that price, the company would be valued at about $22 billion, according to people familiar with the matter who asked not to be identified because the matter wasn’t public. This valuation, dated Sept. 30, reflects the estimated value of the common shares that employees hold. It is a different metric than the often higher valuation that venture capitalists pay for preferred stock.

Yet the increase in vacation for employee stock demonstrates that Airbnb’s business has seen a rebound since the spring plunge caused by the coronavirus.

Airbnb bounced back from the pandemic more quickly than it expected, as people sought long-term, rural rentals to escape hot spots and take advantage of work-from-home opportunities. The company began seeing signs of recovery in June, with bookings down only 30% from the same month in 2019, people familiar with the matter have said. That compared with a 70% decline in May from a year earlier.

© 2020 Bloomberg

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