Letting the Air Out of the Bloat of Online Travel’s IPO
Travel online this week
It’s no secret that the valuations of venture capital and private equity firms in travel startups can be significantly inflated, although Covid and lockdowns are contributing to volatile market conditions.
Skift looked at a crop of eight new short-term rental, travel technology and rideshare companies that went public in 2021. (See the table below.) While many have managed to fill their coffers in conjunction with the 2021 stock market debut, raising net proceeds to fund ongoing operations or dreams of expansion, their previous private valuations appear to have been grossly overestimated in many cases. .
For example, in April To grab, The Singapore-headquartered rideshare, delivery and fintech superapp has announced it will go public under a $ 40 billion PSPC deal. Grab’s debut was delayed, but it started trading on the Nasdaq on December 2, and last week its market cap was relatively large, but barely $ 24.4 billion.
Secure Clear, the biometrics and airport security company, was to go public in a Initial public offering of $ 4.5 billion. It did indeed start trading on June 30 on the New York Stock Exchange, and when tickers ended last week’s session, Clear Secure’s market cap was only $ 1.7 billion.
It is a similar scenario for Vacasa, the predominantly American property management company that began trading on the Nasdaq on December 7. In July, Vacasa announced it would go public under a SPAC deal at a valuation of $ 4.5 billion. But stock investors looked at the company from a different perspective: Last week, Vacasa’s market capitalization was $ 1.7 billion.
These drops for Grab (-47.8%), Clear Secure (-32%) and Vacasa (-26.7%) from their opening prices from the first trading day until last week can be viewed in the table below.
This does not mean that they are weak companies or that they will not one day reach those high valuations. Some of the prospects for these companies call for long-term play. I’m betting on Grab, for example, for the long haul because of its superapp strategy, untapped market, and the strength of its board and leadership.
Yet the hype so far – and this may change – from private investors about these companies’ public debuts has not lived up to the reality.
Online Travel, Short-Term Rental, and Travel Tech Debuts on the 2021 Stock Market
|Society||Sector||stock Exchange||Beginnings in trading||SPAC or IPO||Market capitalization *||Gain / Loss of share price **|
|To assert||FinTech||Nasdaq||01/13/21||Initial Public Offering||$ 21.4 million||(-12.4%)|
|Alloggio||Short term rentals||ASX||11/29/21||Initial Public Offering||$ 25.9 million||16.10%|
|Secure Clear||Biometrics||NYSE||06/30/21||Initial Public Offering||$ 1.7 billion||(-32%)|
|To grab||Carpooling / Delivery||Nasdaq||12/02/21||After-sales service||$ 24.4 billion||(-47.8%)|
|HomeToGo||Short term rentals||Frankfurt||09/22/21||After-sales service||$ 1.04 billion||(-21.7%)|
|Rate Gain||Travel technology||Bombay||12/17/21||Initial Public Offering||$ 611 million||5.90%|
|SiteMinder||Travel technology||ASX||8/11/21||Initial Public Offering||$ 1.2 billion||0%|
|Vacasa||Short term rentals||Nasdaq||12/7/21||After-sales service||$ 1.7 billion||(-26.7%)|
To note: * Market caps are estimates expressed in US dollars
** Gains or losses in the price of the shares indicated at the close of the market on January 7, 2022
Source: Yahoo Finance and Skift
To put it in context, as Grab and Vacasa stock prices plummeted on the Nasdaq, as well as Clear Secure’s decline on the New York Stock Exchange, over the past 12 months the Nasdaq has risen by 14.2 percent, and the New York Stock Exchange was up 15.4 percent.
“A lot of IPOs have been poorly successful so far, trying to achieve unrealistic valuations,” said Richard Clarke of Bernstein, a research outfit. “Obviously the main trend is private leasing, a share gain during Covid, and it’s only natural for start-up investors to try to capitalize on the positive sentiment there, especially if ADRs (average daily rates) go start to moderate. “
Among short-term rental companies, while property manager Vacasa and the German vacation rental meta-search company HomeToGo (-21.7%), saw their valuations plunge, Australia Alloggio has been riding the resurgent wave of vacation rentals with a 16.1% share price rise last week since it went public on November 29.
Many of these companies’ testosterone-filled preparations for public company status have been with continuous red ink, and therefore investor enthusiasm has waned. Often times, patience for the long game gives way to a sense of what you’ve been doing for me lately.
“The only trend I would note is that these companies are still not profitable and are probably in investment mode for a while,” said Dan Wasiolek, a The morning star analyst. “The market appears to have moved away from unprofitable names that are valued more on sales than earnings multiples in recent weeks, possibly due to a Fed communication that is pushing rates of return up. . “
Of course, much of these stock market debuts took place outside of the United States, Alloggio and SiteMinder trade in Australia, HomeToGo presented himself in Germany and Rate Gain sells its shares in India, a testament to the global strength of emerging travel startups.
The generally disappointing performance of IPOs and online travel-related PSPCs in 2021 may not be good news for those waiting behind the scenes in 2021, including the hotel booking site and the Indian operator Oyo, and the American entrants quasi-hotel company Probe, hotel reservation site Hotel planner, and the carsharing market Turo.
Among the group, at least Sonder has lowered its expected valuation to $ 1.9 billion, from $ 2.2 billion at the end of October, but that won’t mean much until its shares are traded on the Nasdaq under. a blazing sun.
District of Columbia restricts short-term rentals
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Last Mile Transit apps dominate 2021 downloads
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Ecuador implements new regulations on travel agencies
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