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.
After its business was throttled by the pandemic in March, Airbnb began seeing signs of recovery in June, with bookings down only 30% for the month compared with 2019, people familiar with the matter have said. That compared with a 70% decline in May from a year earlier.