Only an IPO can save Airbnb, but the timing in full …


Despite disastrous quarterly results, Airbnb continues to prepare for an IPO this fall. In the midst of the corona crisis, it seems like a gamble, but CEO Brian Chesky does not have many alternatives.

For two years now, Chesky has been talking about plans to go public with Airbnb. In 2008, together with two fellow students, he came up with the concept of renting out private rooms or homes to tourists via a website. The idea turned out to be a direct hit. In no time, Airbnb grew into the largest online guest rental platform in the world.

This growth was expanded with loans and capital from private investors. Initially it amounted to several million dollars, but in later capital rounds the amounts jumped spectacularly. This means that many investors, especially those from the very beginning, are increasing the pressure to go to the stock exchange in Wall Street. Because an IPO would give them the opportunity to cash in on their investment. So there is not much choice for Airbnb. If the possibility of resale is not yet available, the company may be obliged to compensate the first investors from its own cash.

Bad timing

But the timing for an IPO is very risky. Airbnb sales plunged to $ 335 million from April to June. In the first quarter that was 842 million dollars and in the second quarter last year it was even almost 1 billion. Due to the collapse of tourism in recent months, accounting is now in the red. In the second quarter there was a loss of 400 million dollars, in the first also just over 300 million. 1,900 employees lost all their jobs at Airbnb.

Nevertheless, the IPO is not doomed to failure in advance. US investors are pushing Wall Street prices to record levels despite the crisis, with Silicon Valley tech giants leading the way. Airbnb certainly has its supporters in that world.

In addition, the company lives on the hope that things will get better. Brian Chesky stated at the end of July that the number of bookings in the first weekends of June was even higher than in June last year. And now that city trips are allowed again, Airbnb is counting on “reasonable” revenue figures for the third quarter.

One thing is certain: because of the corona pandemic, Airbnb is worth a lot less than six months ago. The estimated value has dropped from $ 26 billion to $ 18 billion.


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