Advertisement

WSJ: Airbnb plans to file for IPO with SEC before year-end

According to a report by the Wall Street Journal, Airbnb has plans to confidentially file for a public listing with the SEC by the end of the year. Yahoo Finance’s The Final Round discuss the report and what impact it could have on the company.

Video Transcript

MYLES UDLAND: All right, let's turn our attention now to everything going on in unicorn land. The "Wall Street Journal" reporting that Airbnb will confidentially file for its IPO later this month. Now we did expect that Airbnb would have to come to market at some point within this sort of 2019 to 2021 window. The pandemic at first, Dan Roberts, made it seem like they wouldn't be able to come to market.

And then every new issue has had a great reception. So it makes sense that Airbnb is going to try to fit it in probably before, I guess, the end of the third quarter. So that would be the end of September. But who knows how quickly they can go with their roadshow once they do file the S1.

ADVERTISEMENT

DAN ROBERTS: Well, you're right that the pandemic made it look like they wouldn't be able to go public. And then, clearly, Chesky and the company decided we're going public anyway. Now you remember about a month ago, Brian Chesky did an interview with our editor-in-Chief Andy Serwer. And I found one exchange really interesting, where Chesky said back in January, he went on vacation, thinking that when he came back, the company was going to file its S-1. It had prepared the S-1.

Then the pandemic hit. And he said we put the S-1 filing on a shelf. And then he said now we're dusting it off. And it's like, well, but why? What has changed?

And the answer is nothing has changed. The company has been terribly hit by the pandemic. But it would like the cash. And it would like to go public. So it's doing it.

And the second part here that I think is interesting-- a lot of people expected, and I would have still expected as of, say, yesterday, and maybe this is still the case, that the Journal story first reporting this doesn't mention this, but I would have thought you'd see a direct listing for this company. The Journal story doesn't mention that intention. But you just said roadshow. I mean, this is a company that I would think would benefit from not having to do a roadshow, not having to do the song and dance, and trying to avoid the hype that has come along with and hurt so many of those much-hyped unicorn IPOs in the past.

EMILY MCCORMICK: Yeah, Dan, I think you bring up a really good point. And the Journal story did report it as a potential IPO here for Airbnb. So maybe it remains to be seen as to whether that turns out being a direct listing or an IPO.

But one of the things I think is really interesting is sort of the timing around what this listing would actually be. We are seeing this pickup now in some of these cyclical companies. We're seeing a pickup just the past week or so in a lot of these travel stocks.

So I think there is sort of this prevailing market sentiment that we are off the worst of things when it comes to travel and lodging, when we think about airlines. We just think about the TSA throughput data that we got out for Sunday, the best point so far during the pandemic period. And I think all of that is constructive, of course, for Airbnb being at the center of this industry, this notion that these investors could potentially get in somewhat early, somewhat still at a low relative to maybe where Airbnb's business was a year ago, and could actually capitalize on that growth, I think it speaks a lot to the demand that we may see for shares of this company, as we've seen for other companies that just went public so far this year.

MYLES UDLAND: Well, and Emily, also the issue-- I mean, not an issue necessarily for Airbnb, but something that did happen to the company back in April is they took on that big investment from Silver Lake among others. And so they had already had a very complex capital structure, I guess we could say. And obviously, there's tons of employees there sitting on unvested stock that would really like to have a liquidity event. And certainly Airbnb has been-- has had interim ones. But nothing kind of hits the way an IPO does.

And so you look at this whole period for them, and it raises this question of, to your point, are they responding to what's happening in travel? Or is it more of the traditional, we're an old old-icorn now. And we need the money or we need the liquidity, because we have a lot of people-- investors, employees, et cetera, who are sitting on, again, illiquid, unvested options who need this to happen.

EMILY MCCORMICK: Yeah, I do think that's a really good point, Myles. And I think liquidity, having that IPO liquidity event is a big impetus here for Airbnb, for any other company. The other thing I think some analysts have been pointing out, just about IPO timing and the IPO window for 2020, is a lot these companies are going to want to get ahead of the presidential election, the volatility that might come out because of that surrounding it.

So getting this out before the third quarter is also something that I think-- not only Airbnb, but think about Palantir, think about some of these other companies planning to list this year have also been looking at timing wise.