Airbnb, DoorDash boost price ranges

Startups look to raise $6B as IPO week seeks to break record

December is set to be the busiest year- end on record for initial public offerings in the U.S., with DoorDash and Airbnb ready to start trading this week in long-awaited listings.

The two startups, which are aiming to raise a combined $6.2 billion at the top of their price ranges, will propel the month’s IPO volume to all-time high, surpassing the $8.3 billion mark set in December of both 2001 and 2003, according to data compiled by Bloomberg. IPOs on U.S. exchanges have already raised a record $156 billion this year, the data show.

Both listings got an additional boost as the companies headed into the final stretch of marketing their shares. Airbnb increased the price range of its IPO in an updated prospectus on Monday, after DoorDash upped its own price range in a Friday filing. Airbnb will be valued at as much as $42 billion at the top end of the revised range. The elevated price targets put both companies among the five biggest U.S. IPOs of 2020.

Increasing the price range usually implies that the offering is being well-received among investors and demand is high. Companies are allowed to price their IPO shares up to 20% above the revised range without having to refile with the Securities and Exchange Commission.

Private companies that sat out the market chaos in the early days of the Covid-19 pandemic — and were awaiting a final outcome in the U.S. election — are now rushing to go public. Airbnb and DoorDash will quickly be followed by three other mega-listings that could add billions of dollars to the IPO tally.

Also on deck to go public this month are Affirm Holdings Inc., which lets online shoppers pay for purchases such as Peloton bikes in installments and online video-game company Roblox. Both are likely to attain a valuation of tens of billions of dollars in its listing.

ContextLogic, the parent of online retailer Wish, launched its share sale on Monday. It’s aim

ing to raise as much as $1.1 billion at a fully diluted valuation of $17 billion, its amended prospectus shows.

“This group of companies that you have coming out now maybe weren’t thought of initially as benefiting, but they’ve been able to show very strong results despite the coronavirus,” said Karen Snow, head of East Coast listings at Nasdaq Inc.

Airbnb is aiming to be valued at as much as $42 billion in its IPO, while DoorDash could hit a valuation of about $35 billion, based on their updated price ranges. For DoorDash, that’s more than double the private valuation it hit in a June fundraising round, after it seized on the pandemic-fueled boom in demand for meals brought to your door. Airbnb had been valued at $18 billion in April after raising additional debt to shore up its finances. The company, which was initially hit hard by global travel restrictions, has more recently seen a boom in customers seeking longer-term, domestic rentals.

Airbnb’s IPO will also be a lucrative event for many of its employees. The company has offered billions of dollars worth of stock compensation to staff, similar to Uber Technologies Inc. and other large venturebacked companies that have gone public. The IPO will make some of its longtime employees millionaires on paper.