Airbnb has confidentially filed with the SEC to go public, with the number of shares and price range yet to be revealed.
The timing of the move was questioned by observers, with the public markets in a lull and a reported 67% drop in revenue for the second quarter at the platform.
Prior to the pandemic Airbnb had planned to IPO this year, with a direct listing mooted, which would have allowed its investors to exit, but without raising additional cash.
Reports suggested that the company saw revenue fall to $335m in the period ending June 30, with a loss before interest, taxes, depreciation and amortization of $400m. Bookings were down 30% in June from a year earlier, compared with a 70% decline in May. The company reported an adjusted loss of $341m in the first quarter, compared with a loss of $292m a year earlier.
The platform has seen bookings build as travel restrictions ease, with travellers drawn to the social distancing potential of its properties.
James Chappell, global business director, Horwath HTL, told us: “The question that investors should be asking is why now? Is this the best time for them to go to market, or is this the only time they can go to market? The boom in the stock market has been led almost exclusively by tech stocks, that have give the appearance of an overall lift, but transport is still lagging way behind, (not surprisingly).
“Airbnb have been burning through cash and borrowed a lot at very high rates do they need the IPO to keep the plates spinning? If so, this risks Uber levels of fall off where their stock price halved shortly after launch leaving retail investors holding the baby.
“An additional level of risk is the laundry list of things that Brian Chesky has outlined that the company needs to ‘fix'. Tax, local regulations, over tourism, the platform being host to professional landlords gaming the system. It’s a lot and raises serious questions that probably should be answered before an IPO, not after. My guess is they are hoping that the general irrational frothiness in the market combined with a lack of IPO’s this year will help them out of the gate. What that means for shareholders after that though is another question.”
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