Airbnb and DoorDash target higher-than-expected valuations ahead of IPOs - WSJ

Nov. 29, 2020 8:54 PM ETAirbnb, Inc. (ABNB), DASHABNB, DASHBy: Liz Kiesche, SA News Editor21 Comments
  • Airbnb (ABNB) and DoorDash (DASH), both set to start roadshows this week, are planning for IPO valuations that exceed previous estimates, the Wall Street Journal reports, citing people familiar with the matter.
  • Airbnb is planning a range of ~$30B-$33B, on a fully diluted share count basis, when the home rental company starts its investor roadshow on Tuesday, more than the $30B that people close to the offering had expected.
  • Meanwhile, DoorDash, which starts its roadshow on Monday, plans to target ~$25B-$28B on a fully diluted basis, greater than the $25B that people close to the offering had expected.
  • The per-share price ranges for the IPOs are still unclear.
  • Both companies are on track to list their shares in mid-December, which is usually a quiet month for offerings. The two IPOs would top off a year in which a record amount of money was raised from new issues on U.S. exchanges as booming tech valuations lured a wave of private companies to the public markets.
  • YTD, more than $140B has been raised in 383 IPOs on U.S. exchanges, exceeding the previous full-year record set during the dot-com boom in 1999, according to Dealogic data dating to 1995.
  • Both DoorDash and Airbnb have survived the pandemic as more people have ordered meals to be delivered rather than go to restaurants and more people preferred renting houses for vacations or longer-term stays rather than staying in hotels.
  • Though bookings at Airbnb were hit early in the pandemic, they rebounded in the summer, but still aren't near its pre-pandemic levels.
  • For DoorDash, the potential valuation continues its upward path. Its private valuation grew to $15B this year from $1.4B in 2018 as it commanded an ever bigger share of the U.S. food-delivery market.
  • DoorDash will use a relatively new approach to pricing its IPO by asking investors submitting orders into an online platform being built by Goldman Sachs. DoorDash and its bankers will then use those bids to price the deal and allocate shares.
  • SA contributor Noah Wilson sees the Airbnb IPO as a good long-term bet, while SA contributor Donovan Jones takes a more neutral stance on ABNB.
  • Neither Wilson nor Jones are bullish on DoorDash's public debut.

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