Airbnb's long-awaited Initial Public Offering day is finally here. Later today, the company's shares are going to be listed on the Nasdaq. According to people familiar with the matter, the company that offers people the opportunity to book short-term rentals is valued at around $47 billion.
The company reportedly sold nearly 52 million shares on Wednesday with the price tag of $68 per share, which was well above the initially expected range.
For a long time, the IPO was jeopardised by the coronavirus pandemic, and investors had started fearing further delays into 2021. Nevertheless, the listing was held. What is even more noteworthy, the price tag exceeded the preliminary forecasts, which was particularly surprising given the current conditions.
Airbnb, which was hailed as the new star player of Silicone Valley at one point, has had a devastating year due to curbed international travel. The company's March reckoning worried stakeholders about the prospects of a protracted crisis in the tourism industry.
That is why the timing of the IPO really is the best decision out of a bad situation for the company. Global markets have been recuperating recently due to vaccine optimism, which is why the above-range share price that has been set by Airbnb makes sense.
The company is trying to take advantage of the heightened investors' sentiment, which is momentarily discounting the still ongoing pandemic situation. Airbnb plans to take advantage of investors' hopes for a swift resolution to the pandemic problem, that are associated with a game-changing vaccine.
That is how the current global stock rally could carry Airbnb's shares higher than the initial price of $68, despite the fact that the company's business continues to be massively impeded worldwide as travellers remain grounded.
Meanwhile, the Nasdaq composite index is also facing a make-it-or-break-it point at present. As can be seen on the 4H chart below, the price action has established a higher swing peak recently but is finding it difficult to continue its advance.
The three moving averages – the 20-day MA (in red), the 50-day MA (in green), and the 100-day MA (in blue) – continue to have a Perfect Ascending Order, which underscores the strong bullish commitment in the market. Nevertheless, the index may form a minor bearish correction soon.
At present, it seems that the lowest level that the price could sink to before it finds the necessary support to rebound higher is the major resistance (currently support) level at 12000.00. The latter bearish significant psychological importance.