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.
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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.
Airbnb IPO is the perfect market hedge. If you believe the vaccine is coming quickly, people want to travel again. If you don’t believe it’s coming quickly, people want to work remotely in different locations longer.
— Aaron Levie (@levie) November 16, 2020
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.
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