As per reports obtained from a report published on August 20th, 2020, Airbnb has gone ahead with filing confidential documents with SEC or U.S Security and Exchange Commission, setting the stage for rolling out an IPO.
It may be stated here that filing confidentially has no link whatsoever with the ongoing pandemic but as per norms and regulations laid out in the 2012 Jobs Act, startups are allowed to keep their initiatives and efforts for rolling out IPOs under wraps.
In the private markets before the Covid-19 disaster, Airbnb was valued at USD$31 billion in 2019. However, with the current scenario, the value of the company is at USD$18 billion.
The major reason for the drop in value by around 42% can be attributed to the adverse effects that the pandemic has on the travel-and-leisure stocks that have suffered a tremendous setback.
To name a few others, stock values for cruise operators backslid by 65% followed by hotel operators plunging by 30%. And not to mention, the airline stocks that have been almost halved. The entire scenario is miserable. And amidst the pandemic, many have been wondering what made Airbnb choose this miserable time for rolling out their IPO.
Why did Airbnb take the step?
The move is due to a slight “rebound” that has been taking place in the travel industry. According to the company, based in San Francisco, it announced that as many as 1 million nights’ accommodations were booked on a day since March.
It is being anticipated that in the event the IPO moves forward, the filing would be declared when it is time for a listing.
However, despite the move to file IPO, the total number of shares it is likely to sell has not yet been declared. The company will be able to take a decision depending on the condition of the market and how things take a turn. As mentioned above, it will complete the listing towards the end of 2020.
Airbnb’s core business was home-rental and after Covid-19 sent the world into lockdown and economic and political frenzy, the company was bound to suspend its activities for over a year.