Factors affecting business valuations for IPO purposes: A case study of Airbnb

Kovacs, Adel (2022-01)


The subject company, Airbnb, managed to file its Initial Public Offering amid a global epidemic, which raises several inquiries. The purpose of the current research is to conduct a detailed analysis of Airbnb to discover the key moving factors in its business valuation for IPO purposes. For comparative reasons, the multiple-case study methodology was implemented, which demonstrates the path of four additional companies` IPO decisions under unpredicted circumstances, such as Covid-19 or the Great Recession in 2008. The first step was to explore the different types of business valuation methodologies employed for IPOs, which revealed the only discrepancy from the academic literature. Secondly, factors affecting valuations itself were investigated by looking through each company`s relevant filings with the SEC authorities. Furthermore, to conclude whether the IPO process of Airbnb was successful, the overall capital market appreciation was examined for each company to reveal the possible causing factors. Finally, the choice to go public was reviewed for potential benefits and drawbacks of Airbnb, with particular emphasis devoted to the underlying unprecedented circumstances.