In yet another sign of the top – another desperate unicorn is trotting out its S-1 ahead of its IPO.
This year’s biggest IPOs (an in true 2020 fashion, the biggest deal is a SPAC)…
Pershing Square Tontine, $4 billion SPAC listing
Snowflake, $3.86 billion IPO
Royalty Pharma, $2.5 billion IPO
KE Holdings, $2.4 billion IPO
Lufax Holding $2.4 billion IPO
This time – AirBnB, right at the heart of the pandemic lockdown impact – and the 350 page S-1 shows the bloodbath that this year has been.
The documents show that leading up to the coronavirus outbreak earlier this year, AirBnb was spending heavily on technology and marketing to grow its business.
The home rental company has filed with the SEC to directly list its shares on the Nasdaq under the ticker ABNB starting with a relatively simple intro to the company:
“In the beginning, two friends opened their door. Thirteen years later, four million Airbnb hosts have opened theirs.”
Airbnb reports a net loss of $696.9 million for the nine months ended Sept. 30, a decrease of $374.1 million year over year.
‘COVID-19’ is mentioned 215 times in the S-1. Airbnb says it is not possible to predict the pandemic’s ultimate impact on the future of its business.
“COVID-19 has materially adversely affected our recent operating and financial results and is continuing to materially adversely impact our long-term operating and financial results.”
In 2019, Airbnb reported gross booking value (“GBV”) of $38 billion. During the nine months ended Sept. 30, 2020, Covid-19 sent its GBV tumbling to $18 billion, down almost 40% year over year.
Airbnb’s revenue also took a hit from the pandemic. It brought in $2.5 billion in the nine months ending Sept. 30, down 32% year-over-year.
Airbnb reports $4.5 billion in cash and equivalents as of Sept. 30. That figure has ballooned from $2.0 billion in 2015.
Finally, in addition to COVID-19, Airbnb points to slowing revenue growth and no guarantee of profitability as risk factors of the business.
“We have incurred net losses in each year since inception, and we may not be able to achieve profitability. We incurred net losses of $70.0 million, $16.9 million, $674.3 million, and $696.9 million for the years ended December 31, 2017, 2018, and 2019, and nine months ended September 30, 2020, respectively.”
Also pointing out regulatory risk (“regulation” appears 244 times in the S-1)…
“We are subject to a wide variety of complex, evolving, and sometimes inconsistent and ambiguous laws and regulations that may adversely impact our operations and discourage hosts and guests from using our platform, and that could cause us to incur significant liabilities including fines and criminal penalties, which could have a material adverse effect on our business, results of operations, and financial condition.”
Additionally, AirBnB is cutting its full-time-employee headcount by 25%.
Airbnb says that 86% of its hosts are located outside the U.S. The company does business in 220 countries.
The filing shows that Silver Lake, Sixth Street, DST Global and Sequoia Capital are among Airbnb’s largest shareholders.
The company stated a $1 billion target for the IPO, though that is typically a placeholder amount on an initial filing that will be updated later in the process. The target does suggest big ambitions, though, as the standard place holder is $100 million.