New York: Airbnb Inc. and existing investors are aiming to raise up to $ 2.6 billion in a long-awaited initial public offering that is expected to be one of the busiest years ever for US listings.
The apartment rental platform and some shareholders are offering 51.9 million shares at $ 44 to $ 50 each, Airbnb, based in San Francisco, said Tuesday in a filing with the US Securities and Exchange Commission.
The filing also addresses the key issue of evaluating Airbnb as a publicly traded company. It would have a fully diluted market value of nearly $ 35 billion at the high end of the indicative range. This number includes employee stock options and restricted share units.
Airbnb’s highest rating as a private company was $ 31 billion in a funding round in 2017. Warrants in an April round of debt and equity securities, which included Silver Lake and Sixth Street Partners, valued the company at just $ 18 billion , reported Bloomberg News.
The company’s IPO rating and price range could change over the next week or so depending on demand for its stock on its roadshow with investors.
The company is currently planning to price its IPO on December 9 and start trading its shares on the Nasdaq Global Select Market the next day, said a person familiar with the matter, who asked not to be identified in order to discuss private information . An Airbnb representative declined to comment.
December is expected to be a busy month for IPOs. Airbnb will join a group of companies planning deals including grocery delivery company DoorDash Inc., video game company Roblox Corp., installment loan provider Affirm Holdings Inc., and ContextLogic Inc., the parent company of online discounter Wish Inc.
Airbnb investors, along with its officers and directors, will be able to control the company through Class B shares that have 20 votes each, compared to one vote each for the Class A shares sold. Airbnb’s supporters include supporters of Airbnb venture capital firm Sequoia, Founders Fund, and DST Global.
According to Bloomberg, the IPO would be the fourth largest in the US this year at $ 2.6 billion.
New listings on US exchanges raised $ 152 billion this year, with about half of it from purpose-making companies or SPACs, according to data compiled by Bloomberg. The data shows that the total of $ 317 billion in initial public offerings in 2020 ranks second in the world after 2007 when $ 385 billion was raised.
Recreation while traveling?
Potential Airbnb investors will be looking to see how quickly the global travel industry can bounce back. The coronavirus pandemic hit Airbnb hard at first, but quickly recovered. The gross booking value for the nine months ended September 30th fell to $ 18 billion, nearly 40% less than the same period last year, the records indicate.
Bookings hit their low in April and plummeted 72% year over year. It reduced marketing expenses and reduced the number of full-time employees by about 25%. By June, bookings were only 21% lower year over year.
A surge in the number of people vacationing near where they live made the third quarter the most profitable Airbnb ever based on earnings before interest, taxes, depreciation and amortization. It posted profits of $ 501 million on an adjusted Ebitda basis, a huge increase from the loss of $ 400 million in the second quarter.
Airbnb’s recovery was driven almost entirely by domestic travel or staying within 50 miles of a traveler’s home. Domestic travel prior to the pandemic made up only 52% of Airbnb’s business. It is now almost 80%. A key question for Airbnb – and its potential investors – will be how long does this take?
Airbnb’s third-quarter revenue was $ 1.3 billion, 18% less than the same period in 2019. For the first nine months of the year, Airbnb posted a net loss of $ 697 million on revenue of $ 2 billion. $ 5 billion compared to a net loss of $ 323 million on revenue of $ 3.7 billion for the same period last year.
Morgan Stanley and Goldman Sachs Group Inc. lead Airbnb’s offering. Allen & Co., Bank of America Corp., Barclays Plc and Citigroup Inc. are also listed as underwriters. It plans to trade under the symbol ABNB.
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