Airbnb plans to file paperwork for a stock market listing in the next few weeks paving the way for its shares to start trading as soon as the fourth quarter, according to people familiar with the matter.
IPO Paperwork To Remain Confidential
Home-sharing giant Airbnb reportedly plans to file paperwork for an initial public offering later this month, paving the way for the company to potentially make its public markets debut this year amid the economic fallout from the coronavirus pandemic.
The San Francisco-based company is preparing to submit documents confidentially with the U.S. Securities and Exchange Commission for an initial public offering, said the people, who asked to not be identified discussing private information. The long-awaited move would represent a swift comeback for the home-sharing startup after the coronavirus pandemic sent the travel industry into a tailspin.
The Wall Street Journal reported earlier that Airbnb was planning to file paperwork later this month. Airbnb declined to comment on the matter. The company’s plans could change as new outbreaks of the disease continue to flare in the U.S., the people said.
Airbnb Has Waited Long To Go Public
Airbnb is working with Morgan Stanley and Goldman Sachs Group Inc. on its IPO, according to a person familiar with the matter. Morgan Stanley and Goldman Sachs declined to comment.
Chief Executive Officer Brian Chesky had originally wanted to take the initial steps toward a listing in March, but his plans were nixed by Covid-19. By April, Chesky was facing $1 billion in cancellations, he said in an interview with Bloomberg TV in June. Travel bans and lock-downs caused planned bookings to tumble about 90% and Airbnb cut 25% of its workforce in a bid to survive. Other travel sites, like TripAdvisor Inc. and Booking Holding’s Inc., also hit crisis mode and had to eliminate thousands of jobs.
The COVID Pandemic Impact
By May, Airbnb was already seeing a rebound. The number of nights booked at U.S. listings between May 17 and June 3 was greater than during the same period the previous year, as city dwellers took advantage of work-from-home policies and escaped apartments for nearby vacation rentals. As of June 17, Airbnb’s bookings had increased 20% year over year in the U.S., according to data from market research firm AirDNA.
Prior to the pandemic, Airbnb had been leaning toward a non-traditional route to the public markets. The company was planning to follow in the footsteps of Spotify Technology SA and list directly, forgoing raising new money by selling shares and allowing its investors to put their shares on the market without waiting for a lock-up period. But the turmoil caused by the pandemic forced Airbnb to raise $2 billion in debt and equity securities in April to shore up its finances, reducing its valuation to $18 billion from $31 billion. As a result, the company decided to go the traditional IPO route to raise cash for the business, the people said.
- The company plans to confidentially file IPO paperwork with the Securities and Exchange Commission later this month, The Wall Street Journal first reported.
- Airbnb had plans to go public earlier this year, but put an IPO on hold as the pandemic wreaked havoc on its business, forcing the company to lay off 25% of its staff—nearly 2,000 employees—in May.
- CEO Brian Chesky at the time told employees that Airbnb’s 2020 revenue would be less than half of what the company made in 2019.
- Assuming the company does file its IPO paperwork later this month, that would likely set the stage for an IPO later in 2020, sources told the Journal.
- Airbnb was valued at $18 billion in its latest round of fundraising in April, down from an earlier valuation of $31 billion in 2017.