AIRBNB Inc hosts who were allowed to invest in the home-sharing firm’s US$3.5 bil initial public offering (IPO) more than doubled their money in a few hours on Thursday, a windfall that otherwise would only have been reaped by Wall Street’s elite.
While the vast majority of the newly issued shares went to big mutual funds and other institutional investors, Airbnb reserved US$238 mil worth of stock for its hosts, according to company filings.
These shares had a remarkable run after pricing at US$68 in the IPO on Wednesday. They ended their first day of trading on Thursday up 112.8% at US$144.71.
“It was a good move for Airbnb, as it made hosts feel appreciated for their involvement on the platform,” said Jenn Schreck, a film industry worker and Airbnb host in Atlanta, Georgia.
It was not clear how many hosts participated in the IPO and snapped up some of the 3.5 million shares allocated to them, though one source familiar with the matter said the demand outstripped supply.
Many of the hosts welcomed the opportunity to buy into the IPO after the company refused to compensate them for cancelled bookings during the COVID-19 pandemic. Airbnb is facing a class action lawsuit from hosts and hundreds of arbitration cases stemming from that decision.
“Not everyone was happy with how Airbnb handled host bookings at the start of the shutdown, and a lot of people were talking about jumping ship,” Schreck said.
Her participation in Airbnb’s IPO was the first time she invested in the stock market. She invested US$13,600 for 200 shares, the maximum Airbnb allocated for each US host.
She is now sitting on a paper profit of more than US$15,000, and said she would hold onto to the shares until they hit US$200.
Others decided to pocket the gain as fast as possible.
Air Concierge Inc CEO Ryan Danz, who manages about 500 properties on Airbnb and other platforms, said he has been trying to sell all his shares after the stock started trading.
He was frustrated to find he was only allowed to sell shares through a broker by phone rather than online, and was waiting on the phone to sell. – Dec 11, 2020
