Airbnb set to go public despite Covid-19 troubles

Airbnb filed preliminary paperwork on Wednesday for selling stock on Wall Street despite being severely hit at the start of the year by the Covid-19 pandemic.

The home-sharing business which is based in San Francisco, said it submitted a draft registration statement to the Securities and Exchange Commission in the US.

Airbnb said that it had not decided on the number of shares it is willing to sell or their price. It is also unclear exactly when the IPO will go ahead.

Airbnb said its IPO would take place after the SEC completes its review.

CEO, Brian Chesky, told the Associated Press this summer that he was working on the IPO documents back in March when the coronavirus hit the US.

The company was severely affected by the lockdowns that were enforced around the world to combat the virus as demand hit rock bottom. As travellers were no longer allowed to leave their homes, many of the owners of the appartments who are registered on the platform decided to leave.

Chesky said that as a result, Airbnb’s revenue will likely be less than half of 2019’s revenue.

Demand has rebounded over the summer period as some tourists see home rentals as safer during the pandemic than crowded hotels.

“Our business has not recovered, but we are seeing encouraging signs,” Airbnb said in a post on its website last month.

Airbnb was valued at $31bn at its peak in a 2017 private fund-raising round, though $2bn 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 $18bn, Bloomberg reported.

Renaissance Capital, which follows the IPO market, said in a recent note to investors that market conditions for Airbnb were about as strong as the company could hope for.

Airbnb’s IPO “will be a remarkable comeback after the pandemic decimated global travel, and proof that IPO investors think long-term”, the Renaissance CEO and co-founder, William Smith, wrote.

According to Bloomberg, Airbnb remains one of the most highly anticipated stock listings of this year.