In first IPO price range, Airbnb’s valuation recovers to pre-pandemic levels

This morning Airbnb released an S-1/A filing that details its initial IPO price range. The home-sharing unicorn intends to price its shares between $44 and $50 per share in its debut.

Per the company’s own accounting, it will have 596,399,007 or 601,399,007 shares outstanding, depending on whether its underwriters exercise their option. That gives the company a valuation range of $26.2 billion to $30.1 billion at the extremes.

The company’s simple share count does not include a host of other shares that have vested but not yet been exercised. Including those shares, the company’s fully diluted valuation stretches to $35 billion, by CNBC’s arithmetic.

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The top-end of Airbnb’s simple valuation places it near its Series F valuation set in 2017. Its fully-diluted valuation exceeds that $30.5 billion valuation and is far superior to the $18 billion, post-money valuation that it raised at during its troubled period early in the COVID-19 pandemic.

For those investors, Silver Lake and Sixth Street, the company’s initial IPO price range is a win. For the company’s preceding investors, to see the company appear ready to at least match its preceding private valuation is a win as well, given how much damage Airbnb’s business sustained early in the pandemic.

But how do those Airbnb valuation numbers match up against its revenues, and will public market investors value the company based on its current results, or expectations for a return-to-form once a vaccine comes to market? And if so, is Airbnb expensive or not?

Expectations, hopes and hype

Shares of Booking Holdings, which owns travel services like Kayak, Priceline, OpenTable and others, have almost doubled in value since its pandemic lows and is within spitting distance of its all-time highs. This despite its revenues falling 48% in its most recent quarter. There’s optimism in the market that travel companies are on the cusp of a return to form, buoyed — we presume — by good news regarding effective coronavirus vaccines.

My expectation is that Airbnb is enjoying a similar bump, as investors intend to buy its shares not to bask in awe of its Q4 2020 results, but instead to enjoy what happens in the back half of 2021 as vaccines roll out and the travel industry recovers.

But happens if we stack Airbnb’s revenues against its valuation today?

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