Airbnb Inc. submitted its initial IPO filing on Monday, showing it made a $219million profit in the third quarter despite business briefly sinking amid the coronavirus pandemic.
The company’s SEC filing revealed that it planned to debut in December and list under the symbol ABNB on Nasdaq. Airbnb could amass a $30billion valuation in its offering, Reuters reports.
According to the IPO, Airbnb’s revenue fell 18 per cent in the third quarter to $1.34billion from the same time last year, but managed to rake in $219million in profits.
Airbnb Inc. on Monday filed its initial IPO with the SEC to go public as soon as December
Airbnb garnered a total revenue of $4.8billion in 2019, which is a 32 per cent increase from the $3.7billion made in 2018.
The arrival of the coronavirus pandemic brought the U.S. economy to an unexpected, screeching halt that trickled down to a bevy of industries – many of which struggled throughout the pandemic.
Airbnb stood to suffer substantial financial losses as travel dramatically plunged, meaning would-be renters stayed home when state officials implemented lockdown orders and public health guidelines were first being shared.
CEO Brian Chesky ordered a number of measures, like pay cuts and employee dismissals, to keep Airbnb operating amid the pandemic
The hospitality industry, including hotels, have yet to fully recover from the pandemic’s fallout, but the home-sharing business took a number of measures to stop a more severe reckoning
CEO Brian Chesky pulled back from TV and transportation endeavors, as well as issued salary and staff cuts. Funding towards marketing, a substantial part of Airbnb’s brand, was slashed as well.
Marketing costs shot down 54 per cent to $546 million
The company raised capital from investors, while Chesky directed its app and website to focus more on local vacations during the pandemic.
Airbnb’s standing was, in part, bolstered by the growing work-from-home trend that allowed staffers to complete tasks remotely. Some renters also viewed Airbnb properties as a more feasible vacation spot than typically crowded hotels and motels
Still, Airbnb didn’t walk away without any losses.
A ‘Monthly Booking Trends by Travel Corridor’ graph from Airbnb’s IPO filing showed a significant dip in April, when lockdown orders were firmly in place
Pictured: A ‘Quarterly Gross Booking Value’ graph shared by Airbnb Inc.
Airbnb lost $697million in the first nine months of 2020, which is more than twice the amount it lost during that time period in 2019.
‘During the nine months ended September 30, 2020, our business was materially impacted by the global COVID-19 pandemic, with [a gross booking value] of $18.0 billion, down 39% year over year and revenue of $2.5 billion, down 32% year over year,’ the filing said.
The company added in the filing that a recent uptick in coronavirus infections across Europe could undermine fourth quarter earnings.
Airbnb’s second quarter revenue saw a 72 per cent decrease from the same time last year to $335million.
The filing said that employees would be allowed to sell as much as 15 per cent of their shares come December.
People wear masks as they leave Indian Trails Public Library after voting in Wheeling, Illinois in October
Airbnb, formerly AirBed & Breakfast, was founded in 2008 by Chesky, Nathan Blecharczyk and Joe Gebbia in San Francisco, California, where the three would rent out an air mattress.
As of September 30, it has more than four million hosts and more than 7.4million listings.
‘In more than 220 countries and regions around the world, our hosts have welcomed over 825 million guest arrivals and have cumulatively earned over $110 billion,’ the listing read.
Airbnb noted in its IPO filing that annual gross booking values steadily increased between 2015 and 2019
The number of annual nights and experiences booked with Airbnb also surged over the last four years
Despite the company’s popularity, it faced criticism for several safety and privacy issues.
Some guests complained about voyeuristic behavior from hosts, there were reported thefts and instances of alleged prostitution.
House parties were banned at Airbnb properties this year after five people were shot dead at a celebration last year and to reflect the pandemic.
Questions regarding safety will likely become more prominent when Airbnb officially goes public.