Services
Airbnb Announces Potential Pricing for IPO, and the Valuation Is Huge
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Airbnb has filed an amended S-1 form with the U.S. Securities and Exchange Commission (SEC) for its initial public offering. The company intends to price approximately 51.55 million shares in the range of $56 to $60 apiece, with an overallotment option for an additional 5.0 million shares. At the maximum price, the entire offering is valued up to $3.39 billion. Airbnb intends to list its shares on the Nasdaq under the symbol ABNB.
The underwriters for the offering are Morgan Stanley, Goldman Sachs, Allen, BofA Securities, Barclays, Citigroup, BNP Paribas, Mizuho, Credit Suisse, Deutsche Bank, Jefferies, Wells Fargo, Baird, Canaccord Genuity, Cowen, D.A. Davidson, JMP Securities, KeyBanc Capital Markets, Needham, Oppenheimer, Piper Sandler, Raymond James, Stifel, Wedbush, William Blair, Academy, Blaylock Van, CastleOak, C.L. King, Guzman, Loop Capital Markets, MFR Securities, Mischler Financial Group, Ramirez, Siebert Williams Shank, Telsey Advisory Group and Tigress Financial Partners.
The company offers a service with which anyone can rent out their house or apartment to guests for a short-term or long-term stay. In a sense, this is similar to Uber, but instead of offering a taxi service, it is a hotel service.
Airbnb has competed against the hotel industry and other home rental services for years now, and some investors have been calling for it to have an IPO long before 2020. The company was founded back in 2008.
Its hosts span more than 220 countries and regions and roughly 100,000 cities, and 55% of the hosts are women. As of September 30, 2020, the company had over 4 million hosts around the world, with 86% of hosts located outside of the United States. Hosts had 7.4 million available listings of homes and experiences as of September 30, 2020, of which 5.6 million were active listings.
In 2019, 54 million active bookers worldwide booked 327 million nights and experiences on the platform, and since the founding, there have been over 825 million guest arrivals on Airbnb.
Airbnb estimates its serviceable addressable market to be $1.5 trillion, including $1.2 trillion for short-term stays and $239 billion for experiences. The firm estimates 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.
In terms of its finances, Airbnb had revenues of $2.56 billion, $3.65 billion and $4.81 billion for 2017, 2018 and 2019, respectively. During that time, the company reported net losses of $70.05 million, $16.86 million and $674.34 million, respectively.
The company intends to use the net proceeds from this offering for general corporate purposes, including working capital, operating expenses and capital expenditures.
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