employees and others will be able to sell up to 16.8 million shares of the company’s stock on Thursday when shares of the hot home-sharing company start trading on the Nasdaq market.
This could provide a windfall to Airbnb employees and potentially hold down the expected gain in the company’s share price after Airbnb (ticker ABNB) Wednesday priced its initial public offering of 51.6 million shares at $68, for a total of $3.5 billion. The IPO was priced above the top end of the pricing range of $60 a share. Another five million shares can be offered by underwriters led by Morgan Stanley under the overallotment option. Early indications on Thursday were that the stock would open at over $140.
Airbnb will have about 602 million shares outstanding after the IPO and a fully diluted share count of close to 700 million shares including employee stock.
Other winners from the IPO beside employees include Silver Lake and Sixth Street Partners, which made a $1 billion loan to Airbnb on onerous terms in April, when the company was hard hit by the pandemic. The five-year loan carries an interest rate around 10% and Silver Lake and Sixth Street also received 7.9 million of 10-year warrants on Airbnb stock struck at $28.355 a share. Those warrants are worth more than $300 million based on the IPO price.
The lockup for the vast amount of Airbnb shares expires after it reports results for the March 2021 quarter—likely in April 2021.
Some companies going public allow sales by employees and others on first day of trading while others don’t.
IPO that began trading Wednesday didn’t include a feature that allowed employees or any other shareholders to sell stock on the first day of trading. That may have contributed to the 86% jump in its share price to $189.51 after its IPO of 33 million on shares was priced at $102 a share. The stock is down 7% at $176 in early trading Thursday.
The largest Airbnb holder is Sequoia Capital, which owns 81.3 million shares worth $5.5 billion at the IPO price, followed by CEO Brian Chesky, who owns 76.9 million worth $5.2 billion. Chesky is offering 517,241 shares in the IPO.
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