Airbnb Said to Buy Back $94 Million From Morgan Stanley

(Bloomberg) -- Airbnb Inc. completed its first major investor share buyback, repurchasing $94 million of the privately held company’s stock from Morgan Stanley, people familiar with the transaction said.

Morgan Stanley sold less than a quarter of its Airbnb stake in the second quarter of the year to adhere to the firm’s investment plan, said the people, who asked not to be identified because they’re not authorized to discuss the matter. The recent rise in the home-rental startup’s valuation pushed Morgan Stanley’s funds above the threshold for what they can hold, the people said. Ownership of non-public holdings is generally limited to 10 percent, they said.

Airbnb declined to comment. Morgan Stanley didn’t immediately respond to requests for comment. The repurchase was reported earlier Monday by technology website the Information.

Large stock buybacks are uncommon at technology startups, which typically devote their capital to building the business. Airbnb has placed a priority on retaining control over who owns its shares and can afford to spend on achieving that goal. It’s raised more than $3 billion since it was founded in 2008, according to data compiled by Bloomberg. The San Francisco startup has also offered to buy back employee shares to ease anxieties about when it will go public.

The shares purchased from Morgan Stanley were part of a 2014 investment round that valued Airbnb at $10 billion, the people said. While Airbnb bought the stock at a 15 percent discount to its valuation from early this year, Morgan Stanley made a tidy profit off its investment, they said. A funding round this summer valued Airbnb at $30 billion. Morgan Stanley still holds stake in Airbnb, according to securities filings.

--With assistance from Eric Newcomer To contact the reporter on this story: Olivia Zaleski in San Francisco at ozaleski@bloomberg.net. To contact the editors responsible for this story: Mark Milian at mmilian@bloomberg.net, Andrew Pollack