Airbnb company was founded in San Francisco in 2008. Today it is one of the worldʼs largest online platforms for searching and short-term lease of private real estate worldwide. Airbnb collects charges from the hosts and tenants, which is how it makes profit. Nowadays the company is not only an aggregator service for apartment leasing for private tourists but it also provides other kinds of services:
- it provides services for corporate customers;
- it offers "experiences" — booking tour guides, excursions and other kinds of entertainment;
- it offers venues for wedding ceremonies, parties, banquets;
- it sells "online-experiences": video tutorials, online excursions, sporting activities and other online activities.
During the time of companyʼs existence, billions of dollars have been invested in it. But Airbnb IPO has yet to take place and is highly anticipated by investors around the world.
Airbnb IPO: Key Facts
● Yield Potential: 30%
● IPO Date: December 9
● Exchange: NASDAQ (trading as ABNB)
● IPO Size: $2.98B
● Starting Price: $56.00 to $60.00
● Underwriters: Morgan Stanley, Goldman Sachs
● Earnings in 9 mon. 2020: $2,51B
● EBIT in 9 mon. 2020: -$490M
● Net Profit in 9 mon. 2020: -$697M
● Net Debt in 9 mon. 2020: 0
If the IPO is successful, the company's market cap will exceed $39B.
Companyʼs Financial Indicators before Airbnb IPO
Over the past seven years, the company has raised more than $4.5Bn in capital, helped 150M clients to find housing, and raised more than $40Bn in cumulative bookings through 2016.
Due to the pandemic, the bookings fell by 67% in Q2 2020 (28M booked nights in Q2 2020 versus 83.90M in the same period in 2019). The earnings dropped by 72% YoY, and the company's value went down from $31B to $18B. Airbnb dismissed 25% of its employees and cut advertising costs because of the pandemic.
In Q3 2020, the company is recovering with short-distance domestic trips. The number of nights booked went down by 28%, which is better than in Q2, and while the earnings dropped by 18%, the margin made a record high of 31%. Compared to Q2 (28M of nights booked), the number has improved significantly: 61.80M. Airbnb is also performing better than the competition: Booking.com's earnings dropped by 48% YoY in Q3, Expedia's, by 58%. Some unofficial sources report that Airbnb's value increased from $18B to $22B in Q3.
The company expects a weak winter season in Q4, not only because the number of COVID-19 cases is steadily growing, but because of the low season arrival as well: over the last three years, the number of bookings is usually the highest in Q3, while it plunges significantly in Q4.
With the pandemic having influenced the growth and the ROI, the management does not have any high expectations. This, however, might open up new opportunities for growth, when there are finally less COVID in the EU, and new widespread vaccines arrive in Q1 and Q2 2021. Again, even currently, in Q3, Airbnb performed better than its competition.
Airbnb IPO Date
Airbnb is launching its IPO in the NASDAQ on December 9. You can apply to trade Airbnb IPO before 6:00 pm (UTC+2) on December 8.
Airbnb IPO Outlook and Target Market
By 2030 Airbnb is expecting that more than 400M customers will be using its platform for renting housing and placing their own offerings. "Global Growth" companyʼs report highlights its entry into emerging markets thanks to which the company will continue to grow globally. Entering the markets of China and India will allow the company to gain millions of new customers and significantly increase its earnings.
According to some unofficial sources, the company may raise up to $3B with its IPO.
How to Trade on Airbnb IPO
Interested in investing into Airbnb IPO? You can apply to trade Airbnb IPO before 6:00 pm (UTC+2) on December 8. In order to trade, you need an investment account with Freedom Finance. If you want to invest into Airbnb, you need to open and fund account. The minimum investment amount is $2,000.
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