Tag: Airbnbs

Airbnb’s IPO filing shows it’s navigating the pandemic better than travel industry peers

  • Airbnb’s third-quarter revenue dropped 18% from a year earlier to $1.34 billion because of the pandemic.
  • While that’s a big slump for a company going public, it’s not nearly as steep as the decline many other travel businesses have seen.
  • Airbnb is among a group of consumer internet companies planning to go public before year-end.



Brian Chesky wearing a suit and tie: Brian Chesky, chief executive officer and co-founder of Airbnb Inc., speaks during an Economic Club of New York luncheon at the New York Stock Exchange (NYSE) in New York, U.S., on Monday, March 13, 2017.


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Brian Chesky, chief executive officer and co-founder of Airbnb Inc., speaks during an Economic Club of New York luncheon at the New York Stock Exchange (NYSE) in New York, U.S., on Monday, March 13, 2017.

Airbnb is in the challenging position of preparing to go public amid a slump in revenue. But relative to the rest of the travel industry, the company is thriving.

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In its IPO prospectus on Monday, Airbnb said that third-quarter revenue dropped 18% to $1.3 billion. Compare that to food delivery company DoorDash, which said in its filing on Friday that sales in the latest quarter more than tripled. Among the year’s hottest IPOs to date, software maker Snowflake’s revenue more than doubled in the quarter before it went public, while gaming company Unity grew 43%.

Unlike those companies, and others that hit the public markets in 2020, Airbnb was badly hurt by the coronavirus pandemic. Coming into the year sporting a $35 billion valuation and soaring demand from investors, Airbnb was slammed when travel ground to a halt, which not only caused business to deteriorate but also forced the company to reimburse travelers for cancelations.

Along with airlines, hotels and online travel agencies, Airbnb had a disastrous second quarter. Revenue plummeted 72%, and the company laid off 25% of its workforce, slashed its valuation and raised about $2 billion in high-interest debt.

While other parts of the industry are still in shambles, Airbnb is bouncing back. Even with the third-quarter revenue decline, the period was Airbnb’s second-biggest ever, behind only the the same quarter from 2019. And because the company slashed its sales and marketing costs by 74%, Airbnb turned a profit in the quarter of $219 million.

Airbnb files for IPO, revenue-year-to-date 32% lower in first three quarters

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Airbnb’s customers had to change their ways.

People weren’t traveling so much to big cities like New York, Chicago and Los Angeles, but starting in the summer, they were looking for cabins by the lake or in the mountains to spend a holiday weekend or as an escape for a month or two of remote work.

“They decided to get in their cars and travel close to home, often staying in small towns and rural communities,” Airbnb’s founders wrote in their letter to prospective shareholders in the filing. “Our business rebounded faster than anyone expected, and it showed that as the world changes, our model is able to adapt.”

Compare that to online travel giant Booking Holdings, which earlier this month reported that third-quarter revenue dropped 48% as lockdowns and travel restrictions, “continue to impact travel in the near-term,” said

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Airbnb’s IPO filing shows pandemic’s effect on travel industry

Airbnb Inc. after years of speculation revealed its plans for an initial public offering, disclosing increased losses this year and other details of its finances and operations.

The San Francisco home rental platform in its filing Monday listed the size of the offering as $1 billion, a placeholder that will change as its bankers test demand for the shares. The number of shares to be sold and their proposed price range will be disclosed in a later filing. People familiar with the company’s plans have said it will seek to raise as much as $3 billion in an IPO in December.

The listing is set to be one of the biggest this year, capping an IPO surge that has largely defied the economic devastation inflicted by the COVID-19 pandemic.

The company’s filing confirms the damage it suffered as the pandemic wreaked havoc on the travel industry. Airbnb said it had a net loss of $697 million on revenue of $2.5 billion for the nine months that ended Sept. 30. That compared with a net loss of $323 million on revenue of $3.7 billion for the same period last year.

The company’s potential valuation in an IPO can’t be precisely calculated until the proposed terms and other details are revealed in the later filing. Earlier calculations have fluctuated with the rise, fall and rebound of its business, as well as the reasons for the valuation.

Although Airbnb’s valuation reached $31 billion in a funding round in 2017, warrants in an April round of debt and equity securities that included Silver Lake and Sixth Street Partners valued it at only $18 billion, Bloomberg reported.

A calculation related to employee compensation and tax reporting put the value at about $22 billion as of Sept. 30, people familiar with the matter said. That valuation reflected the estimated value of common shares held by employees at the time. It’s a different metric than the often higher valuation that venture capitalists pay for preferred stock that would come into play in the IPO.

Airbnb’s offering will be led by Morgan Stanley and Goldman Sachs Group Inc. The company plans for its shares to trade on the Nasdaq Global Select Market under the symbol ABNB.

The listing venue was a victory for Nasdaq Inc. over the New York Stock Exchange. Airbnb’s listing is expected to be the biggest on Nasdaq since Facebook Inc.’s 2012 IPO.

Airbnb is set to join food delivery company DoorDash Inc., which filed Friday to go public, in a finale to what is already a record year for IPOs. Driven mostly by the proliferation of special purpose acquisition companies and to a lesser extent by software companies, an all-time record of more than $141 billion has been raised on U.S. exchanges in 2020, according to data compiled by Bloomberg.

Along with Airbnb and DoorDash, online discount retailer Wish Inc. and installment loans provider Affirm Inc. are expected to complete IPOs by the end of the year, people familiar with their plans have said.

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