Airbnb’s opening day stock trades, at more than double its $68 a share IPO price, demonstrate just how much ultra-low interest rates are inflating asset prices, even if they aren’t causing inflation among everyday goods and services. At today’s closing price of $144.71, Airbnb’s valuation of nearly $100 billion is more than five times where the company was valued during the dark days of the pandemic (not those we’re in now but that period earlier in the year when tech executives were suffering along with the rest of America).
Perhaps with home prices in cities like San Francisco falling thanks to the pandemic, cashed-up investors have nowhere else to put their money. Consider: DoorDash’s value increased 300% between June and this week, while Snowflake’s has jumped 900% between February and now. These quick explosions in value undercut the idea that to make the really big returns, you need to invest at the seed stage of a startup and wait 10 years.