Three numbers to start your day:
Airbnb’s Market Value Hits $101 Billion After IPO
After pricing at $68 a share on Wednesday evening, the stock opened at $146 Thursday afternoon, and closed just below that price. As with DoorDash (DASH) 24 hours earlier, the huge IPO-day gains underline just how much demand there is from investors for fast-growing technology companies.
Both Airbnb and DoorDash used a hybrid auction process for their IPOs. That is a new method that theoretically gives underwriters a better sense of investor demand than the traditional IPO procedure. The goal was to price the offerings closer to what market demand implied.
But based on Airbnb and DoorDash’s IPO-day stock surges, that doesn’t appear to have been successful.
U.S. Dollar Index Declines 12% Since 2020 High in Late March
The index measures the price of the currency against a basket of other currencies.
Back in March, it was at its highest level in three years. Investors from around the globe flocked to the safe-haven currency as riskier assets like stocks sold off. But the Dollar index has declined steadily since, as other markets have rebounded and global economic growth improved.
The Federal Reserve’s interest-rate cuts to near zero also hit the dollar. That is still higher than the negative rates in many countries abroad, but the dollar’s advantage is smaller.
Wall Street is forecasting a weaker dollar in 2021. That would be good for foreign stocks and other assets, which are worth more in dollars when the currency weakens.
General Electric Stock Soars 90% in Last Three Months
It’s a high-beta stock. That means it moves more than the market on the way up—and the way down.
GE’s economic sensitivity and relatively high debt load have juiced its returns this fall. As investors became more and more comfortable betting on a sustained economic recovery next year, they got more bullish on GE stock.
And all that debt on GE’s balance sheet means the company’s equity value is more sensitive to the improving projections.
Some on Wall Street are now speculating that GE will sell new shares to shore up its financial position. Executives have said they have no plans to issue new shares. But a 90% stock rally in 3 months could change their minds.
Numbers by Barron’s is our daily podcast. Find out more here.
Write to Nicholas Jasinski at [email protected]
