Airbnb Launches Nasdaq IPO Amid COVID-19, Turns Profitable in Q3

Submitted IPO Prospectus to US SEC on 16th
"Expected to Raise $3 Billion Through IPO This Year"

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] Airbnb, the world's largest accommodation sharing company, plans to raise $3 billion through an initial public offering (IPO). Although the shared accommodation sector was hit hard by the COVID-19 pandemic, Airbnb decided to proceed with the IPO after successfully turning a profit in the third quarter.

According to Bloomberg and other sources on the 16th (local time), Airbnb submitted its IPO prospectus to the U.S. Securities and Exchange Commission (SEC) on the same day. Airbnb plans to list on Nasdaq under the ticker symbol 'ABNB' and initially aims to raise $1 billion through this offering. Bloomberg cited sources saying Airbnb is expected to conduct the IPO next month and raise $3 billion.

Airbnb is considered the biggest IPO 'catch' on the U.S. New York Stock Exchange that investors have been waiting for. Although preparations for the IPO have been underway since last year, the schedule was postponed due to the impact of the COVID-19 pandemic this year. Ultimately, by submitting the prospectus on this day, Airbnb is pushing for a listing within the year.

As a leading company in the sharing economy, Airbnb was directly hit by the COVID-19 crisis. Its net loss from the first to third quarter this year was $697 million, double the net loss of $323 million during the same period last year. However, it succeeded in turning a profit in the third quarter. Revenue was $1.34 billion, down 18% from the same period last year, but it recorded a net profit of $219 million. This was the result of cutting costs by laying off 25% of its total workforce, about 1.9 million employees, and selling off non-core businesses. Additionally, Airbnb revamped its application and website to offer rentals near users' residential areas.

The market expects Airbnb's IPO to be the largest on Nasdaq since Facebook in 2012. After listing, Airbnb's market capitalization is expected to reach up to $30 billion. When raising investors in 2017, the company was valued at $31 billion, but after COVID-19, its valuation dropped significantly to $18 billion when seeking loans.

However, with COVID-19 resurging mainly in the U.S. and Europe recently, it is expected to face operational difficulties for the time being. Airbnb stated, "Due to the COVID-19 situation, future accommodation bookings may decrease further," but added, "Within two months, our business model has shown resilience and started to rebound despite restrictions on overseas travel." Furthermore, Brian Chesky, CEO who will continue to manage the company after the IPO, announced that he will reduce his base salary from the current $110,000 to $1 as a cost-saving measure.

Besides Airbnb, other companies such as DoorDash, the largest food delivery company in the U.S., e-commerce company Wish, and children's game company Roblox are also pursuing IPOs. It is interpreted that these companies aim to secure funds within the year by utilizing the capital flowing into the stock market due to large-scale fiscal and monetary policies.

This content was produced with the assistance of AI translation services.