CFDs are a leveraged product and can result in losses that exceed deposits. Please ensure you fully understand how CFDs work and what their risks are, and take care to manage your exposure. CFDs are a leveraged product and can result in losses that exceed deposits. Please ensure you fully understand how CFDs work and what their risks are, and take care to manage your exposure.

Airbnb shares surge on opening day’s trade, as Wall Street’s IPO euphoria continues

The first day of trade for home rental company Airbnb has gone off with a bang. After listing its initial public offering at US$68, the company’s share price surged 113% in Wall Street trade overnight, to close cash trading at US$144.71 per share. The company currently has a total market capitalization of US$86.5 billion.

Airbnb’s extraordinary launch into public markets extends the trend of extraordinary buying activity for newly floated companies on Wall Street this year. Despite the Covid-19 crisis, and a relatively high volatility environment, highly accommodative financial conditions have seen new floats thrive, with American food delivery company DoorDash floating a day earlier, and recording a similar surge in its share price in its first day of trade.

Questions about the companies current fundamentals have been asked by sceptics of Airbnb’s rally, who’ve diminished it as a reflection of a euphoric market driven by retail investor speculation. However, there remains a strong fundamental thesis for investing in Airbnb amongst market participants. The company is seen as a disruptor to traditional holiday accommodation, with a far more flexible and resilient business model, that’s manage to weather the Covid-19 crisis better than its competitors.

How Airbnb navigates its new life as a publicly listed company will be the core interest for the market now, as the mania of its IPO fades. A lot will depend in the short-term on how the global economy normalizes and recovers from the Covid-19 crisis, as restrictions on domestic and international travel across the world continue to inhibit the profitability of companies sensitive to travel and tourism.

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CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.

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