Can Airbnb Defend Its High IPO Price During The Pandemic?

Shares of home rental company Airbnb could double Thursday when the company makes its trading debut.

The early price indications could mean the San Francisco-based company reaches as high as $157 per share, according to reports. The $68 initial public offering was higher than the $56-60 range established earlier this week, the Wall Street Journal noted.

Airbnb's listing had been put on hold due to the pandemic. The company instead focused on raising money, selling off its noncore assets and laying off about a quarter of its staff. According to the Journal, Airbnb has seen a boost since the start of 2020, with the rental-listing site posting a $219 million profit during the third quarter.

Social restrictions, and quarantines in states such as California, could be a limiting factor for Airbnb until a vaccine for COVID-19 is broadly distributed.

There are many other challenges facing Airbnb. The New York Times noted in September that the company also faces "overtourism, racial bias, fee transparency and controlling the party crowd."

Airbnb's IPO comes after DoorDash Inc. (DASH) went public Wednesday. Companies like DoorDash that deliver food are booming given the limits on indoor dining.

Shares of DoorDash closed 86% higher than its IPO in the previous session but were down 8.4% as of Thursday at 2:16 p.m. ET.

Airbnb in November filed its S-1 and noted that the company "experienced rapid growth since our founding. In 2019, we generated Gross Booking Value [GBV] of $38.0 billion, representing growth of 29% from $29.4 billion in 2018, and revenue of $4.8 billion, representing growth of 32% from $3.7 billion in 2018. During the nine months ended September 30, 2020, our business was materially impacted by the global COVID-19 pandemic, with GBV of $18.0 billion, down 39% year over year and revenue of $2.5 billion, down 32% year over year."

Airbnb acknowledged the setbacks from the pandemic.

"During the fourth quarter of 2020, another wave of COVID-19 infections emerged. As a result, countries imposed strict lockdowns, in particular in Europe. Similar to the impact of the initial COVID-19 wave in March 2020, we are seeing a decrease in bookings in the most affected regions," the company said in the filing.

Airbnb co-founder and chief executive Brian Chesky told the Times that he expects demand to be strong.

“People want to travel, they just don’t want to get on airplanes,” Chesky said. “They don’t want to go for business. They don’t want to stay in the really big cities as prevalently as they used to. They don’t want to be in crowded hotel districts.”