It’s official. Airbnb is eyeing an initial price offering (IPO) after submitting a draft registration to the Securities & Exchange Commission. Given its longtime status as a unicorn start-up and its global success as a hospitality marketplace disruptor thus far, there’s plenty of excitement going around right about now. Here are some quick facts about the Airbnb IPO you may find useful during the coming pub chats before you slap down that hard-earned paycheck on some shares.
What is Airbnb worth?
Prior to COVID-19, Airbnb was privately evaluated to be worth US$31 billion which obviously stoked plenty of interest. Despite pressure from both early employees and investors alike to pull the trigger on filing an Airbnb IPO, they ultimately did not. As of April this year, Airbnb is valued considerably less – but still a respectable amount – at US$18 billion. For perspective, if we convert this to AUD, Airbnb is still valued slightly more than Afterpay’s (ASX: APT) $25 billion market cap. As a starting point. And that’s factoring in the monster tear Afterpay have been on this year. Though keep in mind that figure is likely to change come bell ringing time. No numbers have been confirmed nor the volume on shares which will be available for purchase just yet.
The company health in numbers
In the fourth quarter of last year, Airbnb’s booking reportedly dropped by 40% with losses doubling in the way of US$276.4 million. When COVID-19 seized the world in March of this year, it took an additional US$1 billion kick to the nuggets in lost bookings almost overnight. Then in May of this year, Airbnb was forced to sack approximately 25% of employees – that’s nearly 1,900 individuals. As of this moment, they’ve never been profitable despite the US$4.8 billion of revenue generated last year. But keep in mind, neither has Netflix (NASDAQ: NFLX) which holds a market cap of over US$215 billion and only continues to climb in share price… as well as debt. The good news? Airbnb is forecasted to be back in the black next year and are growing much faster than its competitors. 2021 could indeed be its major comeback year.
When will the Airbnb IPO happen?
The opinion regarding whether this is the right move to go public in the current global climate is divided. Some believe the Airbnb IPO could be the biggest stock market casualty of 2020 for obvious reasons – market volatility, COVID-19, failing to live up to the hype similar to Uber (NYSE: UBER) and Lyft (NASDAQ: LYFT); which now trade at around three quarters and less than half their IPO prices respectively. While others – including the very opinionated Jim Cramer – believes it may be the ‘steal of a century‘ given incumbents like the hotel industry crippled and the gradual return of travel. Plus stonks have been soaring. How else do you explain Apple (NASDAQ: APPL) crossing the US$2 trillion threshold?
As for the matter of when exactly the Airbnb IPO will happen, while the Securities & Exchange Commission may allow for a listing later this year – and CEO & Co-Founder Brian Chesky has stated this company is “ready” regardless of the ongoing pandemic – a date has not yet been set.