AirBNB IPO Shows Good Results, Valued At $30 Billion

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Airbnb is pressing ahead with its initial public offering

AirBNB is in good shape: after a challenging start to the year with a sharp drop in online reservations, the biggest holiday online marketplace has announced it will eventually do its IPO on Nasdaq next month. 

AirBNB IPO is currently valued at $30 billion, which is way less than what bankers estimated two years ago – roughly around the $50 billion.

News came at a time where several vaccines against COVID-19 have been announced, giving hope for the tourism and hospitality industries, pushing online ads for travels in 2021.

With remote working and an increasing demand for getaways and escape weekends in the countryside, AirBNB has shown good numbers for the last quarter, with a profit of $129 million. 

 

COVID pushed AirBNB IPO

Twelve years ago, three roommates thought about an idea where travelers could rent a cheap space at someone’s house, sharing a more personalized experience than just checking in at a hotel. AirBNB was born.

Next month, the company will launch its IPO on the Nasdaq, making it one of the most anticipated IPOs of the season. Currently valued at $30 billion, its CEO Brian Chesky eventually conceded the idea of going public, after years of refusing to do so. The pandemic proved to be the event that finally forced his hand”, added Yahoo Finance. 

As Reuters reminds traders, investment bankers formerly valued the company at $50 billion two years ago. 

Read on Alvexo: “Oil Goes Up Thanks to COVID Vaccine”

Staff Cuts Helped the Growth

However, its CEO made good managerial decisions, cutting staff and thus increasing revenue.

“Airbnb reported a net income of $219 million in the third quarter, a slight drop from a year earlier. The company cut its workforce by 25% in May and slashed its marketing budget, leading to a 75% plunge in sales and marketing costs.”, added MSNBC

Answering to journalists, analysts added that: “Potential long-term investors can look at Airbnb’s ability to adapt to a new reality faster than its rivals as a reason to get in now, along with the expectation that we’re not going to be locked down forever”. 

Remote working could benefit AirBNB

Beyond the fact that a vaccine is on its way and that lockdowns will not become a permanent thing, remote working and learning, might become something more casual.

As a matter of fact, several big tech companies such as Facebook or Google have asked their employees to stay home until 2021, while some other companies have offered the option for employees to work until the end of August 2021, such as Airbnb itself. 

“Employees continue to receive a quarterly $500 credit to use on Airbnb, which can be used to book accommodation for temporary relocations.”, the company added. 

It seems that AirBNB has gotten it all ready for its launch on the markets next month, while many countries have ordered lockdowns or partial stay-at-home shelters for the holidays.

The above content is considered to be market commentary information and shall not be perceived as independent investment research or investment advice.

Note: The opinions expressed in this article are the author's own and do not necessarily reflect the view of Alvexo on the matter.