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While Airbnb has had its tough times with its hosts amid an extenuating refund policy, the company’s public listing move represents significant growth for it in a highly competitive industry.
Following a long hint towards an IPO move, American vacation rental online marketplace company Airbnb Inc has officially filed to go public with the Securities and Exchange Commission (SEC). According to a report from CNBC, the move by Airbnb to go public comes after the San Francisco based firm posted a profitable previous quarter despite the COVID-19 pandemic.
Airbnb recorded a net income of $219 million on revenues of $1.34 billion. The revenue figure was about a 19% dip from that recorded in the year-ago period. According to Airbnb’s prospectus with the SEC, the company intends to trade on the Nasdaq and under the ticker symbol ABNB. Airbnb revealed that it will have three classes of shares including Class A shares which will come with one vote per share, Class B shares dedicated to the founders and early investors and holds 20 votes per share, and Class H shares meant for long-standing hosts with no voting power.
Airbnb’s public listing move comes at a time when the coronavirus pandemic has had a significant impact on the travel industry, and by extension, on Airbnb’s rental service.
“The Covid-19 pandemic and the impact of actions to mitigate the Covid-19 pandemic have materially adversely impacted and will continue to materially adversely impact our business, results of operations, and financial condition,” the company said in its filing.
Irrespective, Airbnb placed its confidence in the cycle of operations as favored by hosts and visitors alike. The company reiterates the sustainability model of the business as new guests refer new visitors while they themselves become hosts at a later time. The company said that when visitors book a space with Airbnb, they become a part of the community, and “return regularly to our platform to book again and recommend Airbnb to others who then join themselves. This demand encourages new hosts to join, which in turn attracts even more guests. It is a virtuous cycle – guests attract hosts, and hosts attract guests.”
Airbnb Saw Hope with Its IPO amid the Pandemic
Not every rental business was able to manage the economic menace ushered in by the COVID-19 pandemic in relation to the halt in guests. As the lockdown rages and work from home policies became imminent across almost all industries, people sought alternatives to the crowded cities that are more prone to be COVID-19 hotspots.
This getaway saw increased rental demands in rural areas and city outskirts and contributed to the early resurgence in demand during the lockdowns in comparison with Airbnb’s competitors which are listed as TripAdvisor Inc (NASDAQ: TRIP), Booking Holdings Inc (NASDAQ: BKNG) amongst others.
While Airbnb has had its tough times with its hosts amid an extenuating refund policy, the company’s public listing move represents significant growth for it in a highly competitive industry. With respect to the IPO, Airbnb named Morgan Stanley (NYSE: MS), Goldman Sachs Group Inc (NYSE: GS), and Allen & Company LLC amongst others as its underwriters.