Despite the novel coronavirus pandemic wrecking havoc on the global tourism industry, the home-sharing business app Airbnb is still going ahead with its planned initial public offering and is preparing the paperwork for selling stock on Wall Street.
The company has already submitted a draft registration statement to the Securities and Exchange Commission, said the San Francisco-based company. It kept details in the statement confidential.
The company has not yet finalized the number of shares in the company it plans to sell and their price, Airbnb said. It has also not taken final decision on the launch date of its IPO.
The market has been for long awaiting the listing of Airbnb which was founded 12 years ago.
He was working on the IPO documents, Airbnb CEO, Brian Chesky, told the Associated Press this summer. Soon after the novel coronavirus pandemic hit the United States in March.
There was an initial hit for the 7m properties listed by Airbnb and demand dropped significantly. The company expects its 2020 revenues to come in at about half of what it had generated last year, Chesky has said.
1,900 employees or about 25% of its workforce was cut by Airbnb in May. A total of $2bn in loans, including a $1bn investment from the private equity firms Silver Lake and Sixth Street Partners was used by Airbnb to fund its operations.
There has however been a rebound in demand as travelers started to view home rentals to be a safer option than crowded hotels during the pandemic. More than 1 million nights’ worth of future business has been booked by guests, the company said on 8 July. This is the first instance that threshold had been reached since 3 March.
“Our business has not recovered, but we are seeing encouraging signs,” Airbnb said in a post on its website last month.
Compared to hotels, the recovery rate for occupancy rates for short-term rentals was much quicker, said AirDNA – a company that tracks the short-term rental industry in a report issued by it last week. There has been more demand for rural destinations within driving distance of travelers’ homes, Airbnb has also said.
The current market conditions were about as strong as the company could hope for, said Renaissance Capital, which follows the IPO market in a recent note to clients.
the Renaissance CEO and co-founder, William Smith, wrote that Airbnb’s IPO “will be a remarkable comeback after the pandemic decimated global travel, and proof that IPO investors think long-term”.
(Adapted from TheGuardian.com)