Monday, December 11, 2023

Airbnb IPO: 6 key points to know

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Airbnb’s long-awaited initial public offering is expected this week, after a tumultuous year in which its home rental business has been hit hard by the coronavirus pandemic.

The company, led by CEO and co-founder Brian Chesky, confidentially filed for its IPO in August, just three months after cutting 2,000 employees due to a slowdown in rentals linked to a pandemic. But while recent documents filed with the Securities and Exchange Commission show how badly Airbnb’s business has been affected, it has also shown some recovery.

Here are some key things to know about the Airbnb IPO.

When does Airbnb go public?

Airbnb is scheduled to go public on December 9, and its shares are expected to start trading on December 10. Zoom, Pinterest, Uber, Lyft.

What is the price of IPO shares?

Airbnb plans to offer 50 million shares at a price of between $ 56 and $ 60 each, which would value the company up to $ 42 billion. Last week, based on strong investor appetite, the company raised the price range from $ 44 to $ 50.

How did Airbnb behave during the pandemic?

The pandemic has caused a major slowdown in Airbnb’s business, but the company appears to have survived the worst.

At the height of the pandemic, in the second quarter, a large number of cancellations and slow bookings resulted in a massive loss of revenue. Airbnb’s $ 334.78 million in revenue fell 72% year over year. In the same quarter, the company’s losses widened to $ 575.6 million, from a loss of $ 297.4 million in the same period the previous year.

Airbnb initially responded to the pandemic by cutting costs. It slashed its workforce by 25%, cut marketing spend, cut 2020 bonuses, and cut executive salaries for six months.

In May, the company said it had started to see clients returning for local getaways and to work remotely. As a result, the company reported third quarter profit of $ 219.3 million, compared to $ 266.7 million it made during the same period in 2019.

What was Airbnb’s activity before COVID?

Before the pandemic, Airbnb’s revenues were growing rapidly, as were its losses. Its revenue grew from $ 2.6 billion in 2017 to $ 3.7 billion in 2018 and $ 4.8 billion in 2019.

But the losses fell from $ 70 million in 2017 to $ 674.3 million in 2019.

The company had 54 million active customers in 2019 and 247 million customer arrivals. He also said that 84% of his revenue came from customers who had hired his service in the past year, up from 82% the year before, which shows that the service is increasingly retaining customers.

What are the challenges ahead?

Airbnb’s biggest challenge is the coronavirus, which continues to keep people in their homes. Some hosts and potential hosts also choose not to list their accommodations on the service.

Meanwhile, city governments frequently change their restrictions on rentals, impacting the company’s ability to accommodate guests.

Beyond COVID-19, the company has also had security concerns, including guests hosting unauthorized parties who have turned violent. After two shootings at California parties left people dead and injured, the company added new rules in an attempt to improve safety.

What is Airbnb’s ticker?

Airbnb will trade on the Nasdaq under the symbol ABNB.

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