Why are Airbnb and DoorDash valued so highly in the Public Market?

The pandemic situation badly affected most industries globally, with some companies finding an abrupt increase in their sales. Even amid the Covid, some renowned private limited and partnership businesses got themselves listed on the country’s stock exchanges. Airbnb and DoorDash are two such companies that provided investors an opportunity to purchase their shares.

Both the companies entered the market with strong performances on the first day of their shares’ trading. Airbnb hit a 112% increase in its share price, and DoorDash shares jumped 85% during their trading debut. The high valuation of DoorDash shares can be related to their rising revenues and profits in the pandemic situation, as in-person dining is not allowed in restaurants. Many restaurants partnered with the company because otherwise, they know their survival chances in the current pandemic will be significantly less. Consequently, the company’s financial statements witnessed $1.9 billion in sales in the last nine months- compared to $600 million in revenue in the previous financial year. The rising share prices of DoorDash make complete sense since investors see it as a lucrative investment opportunity in the lockdown situation.

But wait, Airbnb recently faced a sharp drop off in the rental industry, so what defines their shares’ high valuation?

According to financial experts, Airbnb benefited from investors waiting to invest in the company- for so long. New companies are entering the stock market to raise finance in these difficult times, and some of those experience a skyrocketing demand in the initial days. Similarly, there was a demand for Airbnb and DoorDash shares, leading to their high-valuation in the debut days. It is hard to say that Airbnb and DoorDash will continue to climb in the future after considering the reviews of financial experts. Therefore, potential investors are advised to make the buying decision after doing a proper analysis of both the companies.