AirBnB, DoorDash Raise Share Price Targets As US IPO Market Booms

AirBnB, DoorDash Raise Share Price Targets As US IPO Market Booms Tyler Durden Mon, 11/30/2020 - 06:00

Update (0810ET): DoorDash has just confirmed its pricing range, with 33 million shares priced at between $75 and $85 per share.

• DOORDASH PLANS IPO OF 33M SHARES, SEES PRICING $75-$85/SHARE

All shares of class B common stock will be held by Tony Xu, Andy Fang, and Stanley Tang, all co-founders, current executives and/or directors.  Xu, Fang, and Tang will collectively hold approximately 69% of the voting power.

The money will be used for general corporate purposes, including as working capital, operating expenses and capital expenditures.

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DoorDash and Airbnb are seeking to take advantage of one of the hottest IPO markets in recent memory by asking for a premium from investors when they go public in December.

With stocks at record highs despite one of the worst underlying economic backdrops in memory, the two companies, which have benefited from the pandemic in different ways, are upping the valuation they're seeking from investors in a move that is faintly reminiscent of WeWork's quest for a higher valuation.

Here's more from WSJ:

Airbnb is planning to target a range of around $30 billion to $33 billion—using a fully diluted share count—when the home-rental startup kicks off its investor roadshow Tuesday, according to people familiar with the matter. That is greater than $30 billion people close to the offering had expected.

DoorDash, meanwhile, plans to target a range of around $25 billion to $28 billion on a fully diluted basis, excluding the more than roughly $3 billion in cash and proceeds expected after the IPO. That is greater than the $25 billion people close to the offering had expected. DoorDash’s roadshow is expected to begin Monday.

The naked cash grab is a notable departure from how companies typically handle IPOs, where valuations are initially set conservatively, then moved higher as more demand materializes.

Both companies are on track to list in mid-December, which is typically a quiet month for offerings, ending a banner year for IPOs with a bang. There has already been a record amount of money raised in new issues on US exchanges as soaring technology valuations entice more private companies to take advantage of the frothy demand.

So far this year, more than $140 billion has been raised in 383 initial public offerings on U.S. exchanges, far exceeding the previous full-year record high set at the height of the dot-com boom in 1999, according to Dealogic data.

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AirBnB, DoorDash Raise Share Price Targets As US IPO Market Booms