Airbnb plans to file for its IPO this month (not as poorly-timed as it seems)
Where's the WiFi password?... Airbnb plans to file to IPO this month and could (finally) go public before the end of 2020, according to WSJ's infamous "people familiar with the matter" (#PFWTM). A 2020 IPO was on the books for a while. And then... COVID happened.
- Bookings Plunge: By March, Airbnb bookings in COVID hot spots collapsed by 96%. After getting over $1B worth of cancellations, Airbnb shelled out $250M to cover hosts' losses.
- Valuations Plunge: In March, Airbnb's value fell from $31B to $26B. By the time the pandemic hit full force, its valuation had plummeted to $18B.
Doesn't seem like IPO primetime... Even if Russia's vaccine miraculously proves to be safe and effective (unlikely), the travel/hospitality biz could be doomed for a while. Marriott just reported that sales plunged 72% last quarter — Hilton's sank 77% on similarly depressed bookings. But Airbnb has a few differentiators going for it:
- Airbnbs are generally cheaper and less crowded than hotels, which appeals to our cost-saving, germ-avoiding pandemic lifestyle.
- Staycations & "Work from Anywhere" are rising globally, as people get fed up with staring at their bedroom walls. Long, local getaways are the hot new thing ("Work-from-Hamptons").
- On July 8, guests booked over 1M nights of future stays at global Airbnb listings, the 1st time bookings hit that level since March.
Airbnb is taking the Nike approach... Just do it. The home rental giant has been private for a looong 12 years. Investors are itching for a public listing, and some early employees hold stock options that expire this year. Airbnb could also really use the cash from a public fundraise: in April, it desperately agreed to pay 10% interest on a $1B loan. In May, it sadly laid off 1.9K employees (25% of its staff). With time not on its side, Airbnb may as well take the leap.