Airbnb Inc. plans to file for an initial public offering with the United States Securities and Exchange Commission in August, and go public before the end of this year, according to a Wall Street Journal report Tuesday.
The home-rental marketplace is roping in Morgan Stanely MS as a lead underwriter with Goldman Sachs Group Inc GS playing a supportive role, the Journal’s sources revealed, in line with a Reuters report last year.
There is no certainty on the timeline of the listing, or the form it will take, the people familiar with the matter said. Airbnb could go public directly, or merge itself with a special purpose acquisition company, which is a trend in vogue.
Airbnb was recently valued at $18 billion, down from an earlier figure of $31 billion, as the coronavirus pandemic impacted the core of its business, the Journal noted.
Why It Matters
Airbnb co-founder Brian Chesky in July reportedly told employees that the company wasn't "committing to going public this year, but we’re not ruling it out, either."
The home-sharing firm’s IPO is long-awaited but there is no certainty that the company’s stocks will find favor with investors, given the impact of COVID-19 on travel and hospitality sectors.
“When the market is ready, we will be ready, because Airbnb was down but we were not out,” Chesky said, as reported by the New York Times.
The company announced a layoff of 25% of its workers in May and said it raised $2 billion in both equity and debt to shore up its balance sheet.
SPACs, also known as blank check companies are emerging as a favored route for companies considering a public debut. As of July, 39 companies merged with SPACs and raised $12.3 billion this year, Business Insider reported.
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