More than a decade after Brian Chesky rented out a room in his San Francisco apartment, Airbnb made it official this week: The hospitality marketplace is going public.
The home-share unicorn, most recently valued at $18 billion down from $31 billion, offered few details beyond confirming it has submitted a confidential filing with the Securities and Exchange Commission. Here’s what else you should know about one of the buzziest IPOs this year.
• The prospectus is coming. The SEC began allowing confidential filings for all companies in 2017. Once regulators complete their review, and the IPO is cleared to go, the filing will be made public 15 days before the company starts meeting with investors.
• Cue the virtual roadshow. Airbnb is planning to do a traditional IPO this year, the Wall Street Journal reported, so we can forget about a direct listing or acquisition by a SPAC (special purpose acquisition company).
• Why it’s good timing. Airbnb has faced pressure to go public from early employees whose stock options are set to expire this fall. But the stock market is up (Apple is worth $2 trillion!) and tech companies Lemonade and ZoomInfo saw their stock soar after IPOs this summer.
• Travel is also picking up. Airbnb lost $1 billion in bookings overnight in March, and in May it had to lay off 2,000 employees, or 25 percent of its staff. But — and it’s a big but — people want an escape during this pandemic. For many, a short-term rental is more appealing than a hotel. Gross bookings in June and July rose to last year’s levels, according to the New York Times.
• Is it profitable? Not currently. Airbnb, which generated $4.8 billion in revenue last year, claimed it was profitable on an EBIDTA (earnings before interest, taxes, depreciation and amortization) basis in 2017 and 2018. But it lost $322 million during the first nine months of 2019, down from a $200 million profit a year earlier. Now, with the pandemic, there’s even more ground to make up. During the second quarter, revenue dropped 67 percent year-over-year to $335 million. First-quarter sales were $842 million, Bloomberg reported.
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