Here’s Everything To Know About Airbnb’s 2020 IPO—Which Could Be Nontraditional

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Topline: With 2019 turning out to be a big year for initial public offerings, one of next year’s most hotly anticipated IPOs, Airbnb, already has substantial funding and is likely to debut on the public markets through a direct listing, CNBC first reported.

  • Once expected to go public this year, Airbnb is in no rush to open its shares, as the company has already built a war chest to run its business, founder and CEO Brian Chesky told CNBC on Monday.
  • “We don’t need to raise money, and so we haven’t been in a rush,” Chesky said in the interview, which some see as an indication that the company is indeed leaning toward a direct listing.
  • Airbnb said last month that it plans to go public in 2020, though the company hasn’t confirmed whether it would, like Spotify and Slack, opt for a direct listing.
  • In a nontraditional direct public offering, current shareholders are able to trade their shares but new shares aren’t issued, eliminating the need for middlemen such as investment banks or underwriters.
  • Airbnb was launched in 2008 and has raised a total of $4.4 billion across 15 venture capital funding rounds, according to Crunchbase, giving it a valuation of $35 billion, which would make it the fourth-largest U.S. unicorn (a private company worth at least $1 billion).
  • In a big marketing play, Airbnb also just recently signed a massive Olympics sponsorship deal, rumored to be worth $500 million, according to the Financial Times.

Crucial quote: “Our large shareholders, most of our large investors, have told us they intended to hold the stock for a long time and they actually were doing the opposite of pressuring us to go public,” Chesky said in the CNBC interview. “We think next year will be the right time for us.”

Tangent: Two big banks, Morgan Stanley and Goldman Sachs, are poised to become the lead advisors on Airbnb’s probable direct listing, according to CNBC. Both banks were also involved in the direct listings for music streaming platform Spotify in 2018 and workplace messaging app Slack in 2019. Since their , Spotify’s shares are down 8% and Slack’s are down almost 44%.

What to watch for: Big-name tech startups haven’t exactly fared well in the IPO market this year. Uber’s and Lyft’s shares, for instance, are down 35% and 44%, respectively, since going public. Another overhyped unicorn, WeWork, cancelled its IPO plans after significant concerns from investors about the company’s business model and corporate governance. Airbnb CEO Chesky recently said that WeWork’s failure taught him two lessons—the importance of profit margins and reputation. It remains to be seen whether Airbnb, which said it was profitable on an EBITDA basis in 2018, can attract interest in the market.

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