Airbnb confidentially files for a U.S. initial public offering

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on Aug 20, 2020
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  • Airbnb confidentially files for a U.S. initial public offering (IPO).
  • A specific timeline for the IPO is yet to be revealed.
  • Airbnb didn't reveal the valuation it is targeting or shares it will sell.

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In an announcement on Wednesday, Airbnb Inc. announced to have confidentially filed for a U.S. IPO (Initial Public Offering). Airbnb’s IPO is now expected to be one of the prominent ones in the United States this year.

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Airbnb’s announcement comes as the governments across the globe start to ease COVID-19 restrictions after months of inactivity and business disruptions due to the Coronavirus pandemic that has so far infected more than 22 million people worldwide and caused just under 0.8 million deaths. In a recent announcement, Airbnb banned parties at its rental property listings amidst COVID-19.

Airbnb slashed its workforce by 25% due to COVID-19 challenges

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In July, the short-term home rental company reported over 1 million nights booked in a single day; a milestone that it achieved after five months of hiatus. As travel restrictions eased and U.S. travellers preferred local vacation rentals over hotels, Airbnb’s peer, Booking Holdings Inc. also posted an about 14% rebound in the past 13 weeks.

Airbnb, however, did not offer an insight into the valuation that it is targeting or the number of shares that it hopes to sell in its IPO. While the San Francisco-based company hinted at its plans of going public before the start of 2021, a specific timeline for its IPO wasn’t revealed on Wednesday.

The ongoing health crisis pushed Airbnb into slashing its workforce by a massive 25% in recent months as it weighed on its home-rental business. The company also halted its marketing activities for the time being to combat the economic blow from COVID-19.

Airbnb was valued at £13.62 billion in April following £1.51 billion in debt financing versus a much higher £19.67 billion of internal valuation at the start of March.

Goldman Sachs and Morgan Stanley to serve as lead advisers

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According to general partner Andrea Walne of Manhattan Venture Partners:

“This company may be thinking that the lost value they’ve realised in 2020 could be recouped as a public company and that will be reflected in the upside in their stock price.”

Walne is also an investor in Airbnb. Chairman Kathleen Smith of Renaissance Capital also commented on the news on Wednesday and said:

“We believe that investors are willing to look beyond COVID issues and value companies based upon post-COVID scenarios. It’s a constructive IPO market.”

As per the sources, Goldman Sachs Group Inc and Morgan Stanley have been named as lead advisers for the initial public offering.

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