The Airbnb IPO is Going Through Despite COVID-19

If you went on a vacation in recent years, you most likely used, or at least considered using, Airbnb. The short-term rental platform, which is an icon of the sharing economy, is one of the most popular services in the tourism and travel industry, and is worth tens of billions of dollars. While talks of an IPO have been circling for a while, 2020 was the target year — and then COVID-19 happened. Nevertheless, it seems that Airbnb is going forward with its public offering and we will see it traded on the stock market before the end of this year.

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Things you need to know about Airbnb

  • Airbnb was founded in 2008 by Brian Chesky, Joe Gebbia and Nathan Blecharczyk, all of whom are still with the company, serving as CEO, CPO and CSO, respectively.
  • At its peak, the company was said to be worth more than $40 billion, and had an annual revenue stream of more than $2.5 billion.
  • Until 2020, Airbnb had 150 million registered users, with its services being enjoyed by more than 400 million guests worldwide.
  • In 2020, due to the coronavirus pandemic, the company’s valuation fell as low as $18 billion, and it was forced to cut costs by laying off many of its 6,000+ employees. The company also raised $2 billion in “emergency funds” from investors.

The Airbnb IPO: Questions and Answers

Considering the way the global coronavirus pandemic crippled tourism, many wonder why the company is still going forward with its IPO. Airbnb CEO Brian Chesky has said: “when the market’s ready for Airbnb, Airbnb will go public,” but that is quite ambiguous. Indeed, there are many questions that arise when considering the Airbnb IPO, and we will try to answer some of them below.

What is Airbnb?

Airbnb is a service that was created to enable private individuals to rent out their homes or spare rooms to tourists. The company was founded in 2008 and is considered a major disrupter in the hospitality sector. Over the years, “Airbnb apartments,” which were built or modified to exclusively serve tourists, have been created, and the platform is still favoured over hotels by millions of tourists around the world.

When is the Airbnb IPO happening?

The company is going public on the NASDAQ stock exchange and its shares will  be publicly available on December 10th, 2020.

Why is Airbnb going public in the middle of the COVID-19 tourism crisis?

This may be the billion dollar question. At first, the global pandemic damaged Airbnb’s business, leading to a tremendous number of cancellations and losses amounting to billions. However, as the halt of international air travel became a reality, the company’s business began to pick up again, this time in the form of people looking to get away in their own countries, and even by those looking for a change of scenery when working remotely.

Moreover, there is also the matter of employee stock options. Like many startups, Airbnb offered its workers guaranteed stock options which are expiring this year. This internal pressure from employees could be one of the main drivers for the company to go public despite its recent hardships.

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What is Airbnb worth?

As it is not yet a public company, information regarding Airbnb’s exact worth is not readily available. However, when raising funds, it is evaluated and the information is made public. The highest official valuation it ever received as a private company was in 2017, when it was estimated to be worth $31 billion. Later, investors valued it as high as $42 billion. However, during its “emergency” financing round, brought upon by the coronavirus pandemic, the valuation plummeted to below $20 billion. Later, its valuation was raised to around $35 billion.

What will Airbnb’s stock symbol be?

The ticker symbol for Airbnb will be ABNB.

How to buy Airbnb stock

Due to the high profile of the highly anticipated IPO, eToro will make sure to offer its users Airbnb shares as early as possible. Soon after the IPO, the Airbnb stock will be available for investment at the earliest available rate. Please bear in mind that the initial price listed on eToro may differ greatly from the IPO price.

To buy Airbnb stocks on eToro once they become available, follow these steps:

  1. Go to Airbnb’s page on eToro
  2. Click on “Trade”
  3. Choose whether  to BUY (go long) or SELL (go short)
  4. Set your desired leverage, and Stop Loss and Take Profit points
    Reminder: Long, non-leveraged positions incur 0% commission on eToro
  5. Click on “Open Trade”

The above applies to eToro users with active, funded accounts. To open an account, and invest in Airbnb after the IPO, sign up for eToro by clicking below.

Sources:

  1. https://www.businessinsider.in/business/startups/news/airbnb-ceo-brian-chesky-on-the-companys-ipo-when-the-markets-ready-for-airbnb-it-will-go-public/articleshow/78276873.cms
  2. https://thenextweb.com/syndication/2020/09/11/everything-you-need-to-know-about-airbnbs-2020-ipo-plans/
  3. https://www.valuethemarkets.com/2020/08/27/airbnb-ipo-is-a-40-billion-valuation-possible-in-2020/
  4. https://theconversation.com/how-airbnb-got-its-ipo-plans-back-on-track-145794
  5. https://muchneeded.com/airbnb-statistics/

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For more information, visit stocks.eToro.com

Zero commission does not apply to short or leveraged positions. For additional information regarding fees, click here. For clients of eToro AUS, stocks are offered through ARSN 637489466 operated by Gleneagle Asset Management Limited ABN 29 103 162 278, AFSL 226199, and promoted by eToro Australia Pty Ltd. CAR 001281634. Only stocks traded on leading US and EU stock exchanges are available. All other stocks are offered on a derivative basis and bear commission. Refer to our FSG and PDS before trading with us.

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