The most-hotly anticipated IPO of the year looks to be mere weeks away after Airbnb filed its prospectus with the SEC on Monday night
In 2007, Airbnb co-founders Joe Gebbia and Brian Chesky were two cash-strapped roommates living in San Francisco, living on air mattresses. These, frankly, unappealing living conditions led to the 2008 founding — and naming — of Airbnb.
12 years on and 2020’s coolest IPO has just filed its prospectus to debut on public markets. So, let’s see how the company numbers stack up:
- Q3 net income: $219 million
- Q3 revenue: $1.34 billion (-19% YoY)
- 2020 net loss (as of September 30): $697 million (+115% YoY)
- 2020 revenue (as of September 30): $2.52 billion
Before you look at those losses and think: “Hell no, this is another WeWork waiting to happen”, let’s look deeper.
Why should investors be interested in Airbnb?
Now that we’ve seen the ‘ugly’ numbers, it’s time to look at the potential of Airbnb, and 5 reasons why the most hotly-anticipated IPO in recent memory is cause for great excitement:
- Large customer base: Airbnb has 4 million hosts worldwide (86% from outside the U.S.), and 5.6 million active listings.
- Finances: The company saw rapid revenue growth in the last 3 years, with total revenue hitting $2.56 billion, $3.65 billion, and $4.81 billion in 2017, 2018, and 2019 respectively.
- COVID-19: Pandemics hurt, which is why revenue fell 32% YoY in the first 9 months of this year. However, Airbnb recovered incredibly well, significantly cut costs, refocused on domestic stays, and has managed to pull out a quarterly profit during the worst economic crisis the travel sector has ever faced.
- Host Access To Shares: What better way to ensure long-term loyalty from investors than to offer 9.2 million shares in a direct-offering program to hosts who listed on the site in 2019 and 2020?
- Growth: Airbnb estimates its total addressable market to be $3.4 trillion, including $1.8 trillion for short-term stays, $210 billion for long-term stays, and $1.4 trillion for experiences.
Airbnb’s most recent valuation put it at $18 billion, but some analysts predict that it could be worth as much as $50 billion, and it’s anyone’s guess right now how much shares will go for on its yet-to-be-confirmed IPO date. Most estimates fall in the range of $25-$35 per share. One thing we do know is that it will list on the Nasdaq under the ticker symbol ‘ABNB’.
If you’re interested in an Airbnb investment, now might be the time to add some cash to your portfolio and wait…
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