Airbnb Files for IPO

After months of anticipation, Airbnb filed for IPO yesterday afternoon and in doing so revealed the extent of its pandemic-induced losses during the first half of 2020. While there was no indication from among the paperwork as to what shares of the short term rental behemoth would cost, there were some headline numbers pertaining to the losses sustained during the worst of the global lockdown precipitated by Covid-19. 

Airbnb lost over $916 million between the start of the pandemic outside China and September of this year, a loss which almost accounted for the total amount raised in emergency capital from Zoopla owners Silver Lake and Sixth Street in April. Interestingly though, as those of us working from home have started to feel pent up and national lockdowns have eased, Airbnb cashed in on local vacation rentals and managed to turn a $219 million profit from July to September, a trend that the prospectus believes will continue:

“While our business has been severely impacted by COVID-19 in 2020, we believe that travel will rebound and people will increasingly choose the one-of-a-kind stays and experiences offered by our hosts.”

The upturn in financial fortunes for the San Francisco based company is not only down to demographic trends however with the prospectus showing significant reductions in operating costs over the past few months as employees were let go and expenditure was driven down.

The IPO is expected to go smoothly with shares to become available on the market before the end of the year according to most reports. As the most hotly anticipated IPO of the last few years not only within the industry but also among many Wall Street devotees, Airbnb has been the subject of a great deal of scrutiny and some excellent research over the last few months. Despite any short term corporate losses, global pandemics or ephemeral commentary Airbnb’s management is sanguine about the company’s prospects amid changing consumer behaviour

“We believe that we are still early in the global shift in consumer preferences toward one-of-a-kind stays and experiences, which provides an opportunity to further grow our community and business.”