Delivering on a promise from last year, Airbnb has decided to go public(or at least start the process) and has submitted a draft Registration Statement on Form S-1 to the Securities and Exchange Commission (the “SEC”). The company filed for this IPO confidentially, and has not disclosed any particulars, including the number of stocks that will be available for trade or the amount pertaining to each share.
The company adds that the initial public offering is expected to take place after the SEC completes its review process, and is subject to market and other conditions. However, what we have to take into account here is that Airbnb made a promise to go public in 2019, an era before COVID 19. That being said, 2020 is different market, and the company’s revenue has fallen down immensely in the 2nd quarter, both on a quarterly and yearly basis. Therefore, filing for an IPO when the organization is going through one of its worst phases can be detrimental to the house sharing platform.
Still, this comes as no surprise, as a Wall Street Journal report had predicted earlier this month that Airbnb could be well on its way to filing for an IPO in August itself.
However, the poor quarterly performance makes it more likely for Airbnb to wait for the 3rd quarter results to come in, which hopefully will be better than Q2 due to the world becoming more accustomed to the virus. If that is the case, and the company does plan on waiting for a high note before trading its stock publicly, then we might have to wait at least a month and a half more before we see an official IPO (when the company releases its Q3 earnings). However, it’s entirely possible that Airbnb does not want to wait that long, and pushes for a public offering as soon as it gets approval from SEC.
The platform did have some problem in the earlier stage of corona, laying off staff members in huge numbers and taking on billions in capital at a pretty expensive price. However, since then, it has seemed to stabilize and reported some positive news. For example, the company said that during May 17 to June 6, 2020, there were more nights booked for travel to Airbnb listings in the US than during the same time period in 2019, adding that “globally, over the most recent weekend (June 5-7), we saw year-over-year growth in gross booking value.”
Thus, the timing of the IPO is still undecided.