Despite Covid-19 obliterating tourism around the world, Airbnb – the US-headquartered home-sharing and vacationing company – has filed for an initial public offering. This comes as a big surprise to many, as the company had its fair share of struggles throughout the Covid-19 pandemic. Locally, tourism was put on hold. In an attempt to curb the spread of the virus, a strict lockdown prohibited any non-essential travelling – including leisure travel. As a result, local Airbnbs have suffered, going months without income. While hotels and other tourism-related industries could open earlier, various house-sharing companies (such as Airbnb) were not allowed to operate until recently. Now, as the country is in level 2, Airbnb is allowed to operate, much to the relief of many hosts across the country. – Jarryd Neves
Airbnb files confidentially for IPO with SEC
By Preetika Rana
(Wall Street Journal) – Airbnb Inc. said Wednesday it confidentially filed paperwork with the Securities and Exchange Commission for an initial public offering, marking a surprising turnaround for a company whose business was initially ravaged by the coronavirus pandemic.
___STEADY_PAYWALL___
The Wall Street Journal reported last week that the company was close to such a filing.
The San Francisco-based home-sharing giant said the number of shares and the price range for the proposed offering haven’t been determined. Airbnb is leaning toward listing its shares on Nasdaq, according to people familiar with the matter. There is no guarantee it will do so, and the company could still opt for the New York Stock Exchange instead.
Airbnb said late last year that it planned to go public, but its plans were thrown into disarray as the health crisis shut down global travel. It initially had planned to make its widely anticipated debut on the public markets this year via a direct listing, which wouldn’t involve raising any additional money, but now plans to raise cash through a traditional IPO.
Read also: Airbnb still locked down in SA, but there are IPO plans in the US – Wall Street Journal
Airbnb joins a rush of companies tapping public investors after the IPO market emerged from a virtual standstill triggered by the coronavirus pandemic. Still, its offering will test the public markets, particularly amid increased wariness for money-losing startups. Chief Executive Brian Chesky is under pressure from employees to list this year because many valuable stock options are set to expire.
Founded in 2008 after the company’s co-founders began renting guests an air mattress in their downtown San Francisco apartment, Airbnb grew into one of the most highly valued startups over the last decade. It was privately valued at more than $30 billion in 2017 and earned $4.8 billion in revenue last year, according to financial statements reviewed by the Journal.
But its administrative costs also soared in recent years as it spent big on a trendy corporate headquarters and struggled to police crime and safety in its rental homes. That led the company to post a net loss for the first nine months of 2019, down from a profit in the same period a year earlier.
Then, the pandemic struck this year. Bookings vanished overnight and the company found itself in the crosshairs of angry hosts who also saw their earnings evaporate as the company refunded guests.
 Read also: IHS: Potential for Africa’s biggest IPO to be offered in the US
Airbnb rushed to secure $2 billion in debt at a steep interest rate—and with warrants to its investors that when exercised would value the company at $18 billion, nearly half of what it was valued in 2017. In May, Airbnb said it would lay off a quarter of its staff.
Since spring, however, Airbnb’s recovery has been surprisingly swift. Even as people stayed closer to home, they still sought rental-home bookings. On July 8, guests booked more than one million nights of future stays at Airbnb listings around the world, the company said. It was the first time to hit that level since March 3.
While bookings are still down year-over-year globally, bookings in the U.S. in June and July grew 22% and 6.7% year-over year, respectively, according to AirDNA, an analytics firm that tracks the short-term rental market.
