Friday,
December 11, 2020

Market recap

Dow Jones

29999.26

-69.55 (-0.23%)

S&P 500

3668.10

-4.72 (-0.13%)

Nasdaq

12405.81

66.85 (0.54%)

Airbnb

$144.71

$76.71 (112.81%)

Facebook

$277.12

-$0.80 (-0.29%)

Google

$1,767.65

-$10.21 (-0.57%)

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Top Story

Airbnb’s Blockbuster Public Debut

Airbnb’s First Trading Day

Airbnb (ABNB) has finally made its much anticipated public debut. 2020 has been tumultuous for the home rental startup, but the company is now ending the year on a high note. As Airbnb began its investor roadshow last week, it established a target range of $44 to $50 per share—but executives soon realized this was too low.

On Wednesday night shares were priced at $68 each. By the end of the trading day yesterday they were up over 112% closing at $144.71 per share.

Capping off a Tumultuous Year

Airbnb initially planned to go public in the spring, but when the pandemic set in across the world, Airbnb’s bookings and revenue tumbled. In April the company raised $1 billion in debt from private equity firms Silver Lake and Sixth Street Partners. It also laid off 25% of its workforce and cut executive pay to weather the storm.

As the pandemic went on Airbnb made a remarkable comeback. People looking for more space to work, study, and quarantine at home turned to the platform to rent homes for long-term stays, not just vacations. The company’s revenue rebounded in the third quarter to hit $1.34 billion. Airbnb also managed to earn a profit of $219.3 million during the third quarter, which is down from $266.7 during the same period a year earlier but is still impressive given the circumstances.

A Record Breaking Year for IPOs

Though December tends to be a slow time for the IPO market, this year some companies are rushing to go public before the end of 2020. DoorDash made its public debut on Wednesday and smashed expectations, closing up 86% after its first trading day. Video game company Roblox and ContextLogic Inc., parent company of ecommerce platform Wish, are also planning IPOs later this month.

Already in 2020 there has been $140 billion raised on US exchanges, and that number will likely be higher by the year’s end. This is well above the record of $107 billion set during the 1999 dot-com boom. Just like Airbnb, the IPO market suffered at the onset of the pandemic, but it is ending a volatile year with a bang.

SoFi Member Stories: Dilan

Dilan’s mission is to make the world a happier, healthier place—and student loans won’t stand in the way of that dream.


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Legal Action Becomes a Reality for Big Tech

Lawmakers Take Action

In recent months lawmakers around the world have voiced concerns about Big Tech’s dominance, and have talked about taking action to curb these companies’ power. Now after months of discussion, a number of lawsuits against Big Tech are heating up.

Facebook (FB) is under scrutiny in the US surrounding its purchases of potential competitors. Meanwhile in France, Google (GOOGL) and Amazon (AMZN) are facing pushback about the way they collect user data.

Lawsuits Against Facebook in the US

The Federal Trade Commission, along with 48 attorneys general, have filed antitrust lawsuits against Facebook. The company is being accused of unfairly maintaining a monopoly by acquiring potential competitors, specifically messaging platform WhatsApp and photo sharing app Instagram. Facebook purchased Instagram and WhatsApp in 2012 and 2014, respectively.

The FTC is pushing for Facebook to divest from some of its recent acquisitions. The commission also wants Facebook to go through regulatory approval before it makes future purchases. Facebook has argued that the FTC gave the social media giant the green light when it was putting together deals to buy Instagram and WhatsApp. Facebook has warned that forcing it to break up after it has invested in its acquisitions for years will make other tech companies nervous about mergers and acquisitions. Facebook says this would significantly hamper growth and innovation in the tech industry.

Regulatory Battles for Amazon and Google in France

While Facebook deals with regulatory battles at home, fellow tech giants Amazon and Google are facing fines from the French government. France’s privacy watchdog, the CNIL, has issued over $163 million in fines to the two companies.

France has accused the two tech giants of storing advertising identifiers, called cookies, on users’ computers without their knowledge or consent. Both companies said they have changed their websites to ensure cookies are only used with users’ permission, but regulators say the companies still are not providing sufficient explanations to users. Investors will be carefully watching to see how these, and other disputes between lawmakers and tech companies, unfold.

Friday Fundings: Calm, Catawiki, and Sunday

Calm Works to Meet Growing Demand for Mental Health Resources

Calm, the meditation and relaxation app used by millions, has raised $75 million in fresh funding from investors including Lightspeed Venture Partners, TPG, and Insight Partners. This bumps the app’s valuation to $2 billion.

Individuals and companies have flocked to Calm during the pandemic. Many have faced anxiety, depression, and other mental health challenges this year while dealing with isolation and the loss of loved ones. Daily downloads of Calm have doubled in 2020 compared to 2019. People have listened to more than 1 billion minutes of content on Calm this year—a 100% jump from levels in 2019.

With its new funding, Calm hopes to grow through mergers and acquisitions, as well as add to its offerings, especially in international markets. This week, for example, it is adding content for Japanese-speaking listeners. Though hopefully next year will bring some much-needed relief from the stress of COVID-19, the pandemic has highlighted the importance of mental health, and resources like Calm.

Online Collectibles Catalogue Raises $182 Million

Catawiki, a Netherlands-based ecommerce platform, has secured $182 million in fresh funding. The round was led by Permira with participation from Accel, an existing backer.

Caawiki specializes in selling collectibles like classic cars, art, and jewelry, through online auctions. The platform has more than 10 million monthly unique users, who are mostly in Europe. With the new funding, the company plans to invest in marketing, technology, and hiring.

Sunday Raises Funding for a New Model of Lawn Care

Sunday, a startup rethinking the way the lawn care industry operates, has secured $19 million in a Series B funding round led by Sequoia Capital. Other investors included Tusk Ventures and Forerunner Ventures. The Boulder-based company has now raised a total of $28 million over the course of its two-year existence.

Sunday offers customized DIY lawn care products and sells them through a subscription model. The company develops a unique plan for each of its clients with the goal of cutting down the amount of pesticides people use on their lawns. With the new funding, Sunday plans to work on developing its products and expanding its team.

Not-So-Breaking News

  • Yesterday Instagram (FB) rolled out a shopping feature in Reels, its new short-form video initiative. With Reels, the company hopes to compete with TikTok, which already offers a shopping feature through a partnership with Shopify (SHOP).
  • The SEC reported that General Electric (GE) will pay a $200 million fee to settle charges that it gave investors misleading information about how it was generating earnings through its power and insurance businesses.
  • Gilead (GILD) is planning to pay $1.4 billion for MYR GmbH, a Hepatitis Drugmaker. The all-cash deal will expand Gilead's portfolio of hepatitis treatments and highlights the company's acquisition-driven strategy to increase revenue growth.
  • Massachusetts Mutual Life Insurance Co. made a $100 million investment in bitcoin. The high-profile move highlights increasing institutional adoption of the cryptocurrency.
  • First-time unemployment filings jumped to 853,000 last week, well above economist estimates of 730,000. The latest figure is the highest it’s been since September and the first time since October that it has risen above 800,000.
  • For many people, it’s not easy to stop spending money. But, if you’re trying to spend less, here are some strategies that might help.

Financial Planner Tip of the Day

"If you’re trying to limit your holiday spending, set a budget. Make a list of who you plan to shop for, some gift ideas, and a spending limit for each person. Having a plan of action when it comes to holiday shopping on a budget will go a long way in ensuring you stay on track."

Brian Walsh, CFP® at SoFi

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