Airbnb files confidentially for IPO with travel rebounding

By Olivia Carville and Crystal Tse

Airbnb Inc. said it has filed to go public in a long-awaited listing as the company emerges from the effects of the coronavirus pandemic.

The San Francisco-based company said Wednesday in a statement that it submitted its filing for an initial public offering confidentially to the U.S. Securities and Exchange Commission. The size and price range for the offering haven’t been set yet, the company said.

Airbnb remains one of the most highly anticipated stock listings of this year. Chief Executive Officer Brian Chesky had originally intended to initiate the listing process with the SEC on March 31. That was before Covid-19 closed borders, grounded flights to a halt and left the company with more than $1 billion in cancellations. With the markets in turmoil, plans were put on hold.

The comeback for travel following the first peak of the pandemic was faster than expected, though, helping keep Airbnb’s plans for a public market debut moving ahead.

The company began seeing signs of recovery in June, with bookings down only 30% for the month in 2019, people familiar with the matter have said. That compared with a 70% decline in May from a year earlier.

“The trajectory that Airbnb would’ve seen had we not been in the midst of a pandemic would’ve been so much more impressive.” said Arun Sundararajan, a professor at New York University’s Stern School of Business. “Against the odds, it appears the stock market is still receptive to tech IPOs.”

While it’s risky for any company in the travel industry to be going public this year, there’s growing evidence investors think tech platforms are going to control a larger portion of the economy, Sundararajan said.

Airbnb’s revenue fell to $335 million in the second quarter, the people said. That was down at least 67% from the more than $1 billion the company reported in the same period last year, a shift that reflects the magnitude of the impact of the pandemic on global travel. It was also a steep decline from the $842 million in sales in the first quarter, according to financial information viewed by Bloomberg.

Airbnb recorded a loss before interest, taxes, depreciation and amortization of $400 million for the three months ended in June, the people said. The company reported an adjusted loss of $341 million in the first quarter, compared with a loss of $292 million a year earlier.

Airbnb was valued at $31 billion at its peak in a 2017 private fund-raising round, though $2 billion in debt issuance to shore up its finances this year has significantly reduced that valuation. In a round of debt and equity securities in April that included Silver Lake and Sixth Street Partners, the warrants valued the company at $18 billion, Bloomberg reported.

Airbnb had been leaning toward a direct listing in which it wouldn’t raise money by selling new shares as it would in a traditional IPO. Instead, its investors could have put their shares on the market without waiting for a lock-up period.

Two other San Francisco-area technology companies, Palantir Technologies Inc. and Asana Inc., are moving ahead with direct listings in late September, people familiar with their plans have said.

Airbnb said its IPO would take place after the SEC completes its review, subject to market and other conditions.