Airbnb, in a long-awaited filing for an initial public offering, outlined widening losses and plunging revenue while projecting optimism for a rebound in demand for home-sharing when the economy eventually recovers from the coronavirus pandemic.
The listing is set to be one of the biggest this year, capping an IPO surge that has largely defied the economic devastation inflicted by the pandemic.
The company’s filing Monday confirms the damage it suffered as Covid 19 wreaked havoc on the travel industry. Its gross booking value for the nine months ended September 30 tumbled to $18 billion (Dh66bn), down almost 40 per cent from the same period last year, it said.
Airbnb had a net loss of $697 million on revenue of $2.5bn for that nine-month period, compared with a net loss of $323m on revenue of $3.7bn for the same period last year, according to the filing.
The San Francisco-based home rental platform listed the size of the offering as $1bn, a placeholder that will change as its bankers test demand for the shares. The number of shares to be sold and their proposed price range will be disclosed in a later filing. People familiar with the company’s plans have said it will seek to raise as much as $3bn in an IPO in December.
After its business was throttled by the pandemic in March, Airbnb’s bookings bottomed out in April, plummeting 72 per cent from the previous year. It reduced marketing expenditures and cut its full-time employee headcount by about 25 per cent. By June, bookings were down just 21 per cent year-over-year.
After a rough second quarter, a surge in people taking near-home vacations elevated the third quarter to Airbnb’s most profitable ever on the basis of earnings before interest, taxes, depreciation and amortisation. It reported $501m in income on an adjusted Ebitda basis, a big swing from the $400m loss in the second quarter.
Still, Airbnb’s revenue for the third quarter was $1.3bn, down 18 per cent from the same period in 2019, according to the filing.
Airbnb, though, has weathered the travel slump better than its competitors: Booking Holdings’ revenue in the third quarter was down 48 per cent, and Expedia’s was down 58 per cent.
Airbnb’s offering will be led by Morgan Stanley and Goldman Sachs, Allen & Co., Bank of America, Barclays and Citigroup are also listed as underwriters. Airbnb plans for its shares to trade on the Nasdaq Global Select Market under the symbol ABNB.
The listing venue was a victory for Nasdaq over the New York Stock Exchange. Airbnb’s listing is expected to be the biggest on Nasdaq since Facebook’s 2012 IPO.
The company’s potential valuation in an IPO can’t be precisely calculated until the proposed terms and other details are revealed in a later filing.
While Airbnb’s valuation reached $31bn in a funding round in 2017, warrants in an April round of debt and equity securities that included Silver Lake and Sixth Street Partners valued it at only $18bn, Bloomberg reported.
Airbnb’s investors included the venture capital firm Sequoia, which had 16.4 per cent of the voting power leading into the IPO. Other top investors include Founders Fund with 5.4 per cent and DST Global with 2.3 per cent. Those investors, along with the company’s executives and directors, will be able to control the company through Class B shares, which will carry 20 votes each compared with one vote each for the Class A shares being sold in the IPO.
Similarly to Uber Technologies Inc.’s directed share programme for drivers in its 2019 IPO, Airbnb is reserving a portion of its stock for its hosts. It will apply only to those residing in the US who have hosted guests in 2019 and 2020.
Airbnb is set to join food delivery company DoorDash, which filed Friday to go public, in a finale to what is already a record year for IPOs. Driven mostly by the proliferation of special purpose acquisition companies, or SPACs, and to a lesser extent by software companies, an all-time record of more than $141bn has been raised on US exchanges in 2020, according to data compiled by Bloomberg.
Along with Airbnb and DoorDash, online discount retailer Wish and installment loans provider Affirm are expected to complete IPOs by the end of the year, people familiar with their plans have said.
One consequence of the pandemic was that Airbnb opted to issue new shares to raise capital in a traditional IPO. It had previously leaned toward a direct listing in which its investors could have put their shares on the market without waiting for an IPO lock-up period to expire and without the value of their shares being diluted by the issuance of new stock.
Airbnb was founded by Brian Chesky, Joe Gebbia and Nathan Blecharczyk in 2008 during the financial crisis as a cheaper alternative to hotels.
Airbnb attained a $10bn valuation in a 2014 funding round. Chesky, the chief executive officer, faced mounting pressure from employees in 2018 to take the company public. With some employees’ shares approaching expiration dates, that pressure had built.
The company operates as a two-way platform, connecting people who want to rent all or part of their homes to make extra cash with travelers seeking cheap – and sometimes quirky – accommodations. Castles, tree-houses, caravans, sheep wagons and even Will Smith’s wing of the Fresh Prince of Bel Air mansion have all been advertised on Airbnb. The platform makes its money by taking a cut of the bookings.
If you go
The flights
There are various ways of getting to the southern Serengeti in Tanzania from the UAE. The exact route and airstrip depends on your overall trip itinerary and which camp you’re staying at.
Flydubai flies direct from Dubai to Kilimanjaro International Airport from Dh1,350 return, including taxes; this can be followed by a short flight from Kilimanjaro to the Serengeti with Coastal Aviation from about US$700 (Dh2,500) return, including taxes. Kenya Airways, Emirates and Etihad offer flights via Nairobi or Dar es Salaam.
'Dark Waters'
Directed by: Todd Haynes
Starring: Mark Ruffalo, Anne Hathaway, William Jackson Harper
Rating: ****
More from Neighbourhood Watch:
Ms Yang's top tips for parents new to the UAE
- Join parent networks
- Look beyond school fees
- Keep an open mind
Defence review at a glance
• Increase defence spending to 2.5% of GDP by 2027 but given “turbulent times it may be necessary to go faster”
• Prioritise a shift towards working with AI and autonomous systems
• Invest in the resilience of military space systems.
• Number of active reserves should be increased by 20%
• More F-35 fighter jets required in the next decade
• New “hybrid Navy” with AUKUS submarines and autonomous vessels
Director: Shady Ali
Cast: Boumi Fouad , Mohamed Tharout and Hisham Ismael
Rating: 3/5
Avatar: Fire and Ash
Director: James Cameron
Starring: Sam Worthington, Sigourney Weaver, Zoe Saldana
Rating: 4.5/5
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
The National's picks
4.35pm: Tilal Al Khalediah
5.10pm: Continous
5.45pm: Raging Torrent
6.20pm: West Acre
7pm: Flood Zone
7.40pm: Straight No Chaser
8.15pm: Romantic Warrior
8.50pm: Calandogan
9.30pm: Forever Young
Greatest Royal Rumble results
John Cena pinned Triple H in a singles match
Cedric Alexander retained the WWE Cruiserweight title against Kalisto
Matt Hardy and Bray Wyatt win the Raw Tag Team titles against Cesaro and Sheamus
Jeff Hardy retained the United States title against Jinder Mahal
Bludgeon Brothers retain the SmackDown Tag Team titles against the Usos
Seth Rollins retains the Intercontinental title against The Miz, Finn Balor and Samoa Joe
AJ Styles remains WWE World Heavyweight champion after he and Shinsuke Nakamura are both counted out
The Undertaker beats Rusev in a casket match
Brock Lesnar retains the WWE Universal title against Roman Reigns in a steel cage match
Braun Strowman won the 50-man Royal Rumble by eliminating Big Cass last
'Avengers: Infinity War'
Dir: The Russo Brothers
Starring: Chris Evans, Chris Pratt, Tom Holland, Robert Downey Junior, Scarlett Johansson, Elizabeth Olsen
Four stars
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THE DETAILS
Director: Milan Jhaveri
Producer: Emmay Entertainment and T-Series
Cast: John Abraham, Manoj Bajpayee
Rating: 2/5
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Biog
Mr Kandhari is legally authorised to conduct marriages in the gurdwara
He has officiated weddings of Sikhs and people of different faiths from Malaysia, Sri Lanka, Russia, the US and Canada
Father of two sons, grandfather of six
Plays golf once a week
Enjoys trying new holiday destinations with his wife and family
Walks for an hour every morning
Completed a Bachelor of Commerce degree in Loyola College, Chennai, India
2019 is a milestone because he completes 50 years in business
COMPANY%20PROFILE%20
%3Cp%3EName%3A%20DarDoc%3Cbr%3EBased%3A%20Abu%20Dhabi%3Cbr%3EFounders%3A%20Samer%20Masri%2C%20Keswin%20Suresh%3Cbr%3ESector%3A%20HealthTech%3Cbr%3ETotal%20funding%3A%20%24800%2C000%3Cbr%3EInvestors%3A%20Flat6Labs%2C%20angel%20investors%20%2B%20Incubated%20by%20Hub71%2C%20Abu%20Dhabi's%20Department%20of%20Health%3Cbr%3ENumber%20of%20employees%3A%2010%3C%2Fp%3E%0A
The bio
Who inspires you?
I am in awe of the remarkable women in the Arab region, both big and small, pushing boundaries and becoming role models for generations. Emily Nasrallah was a writer, journalist, teacher and women’s rights activist
How do you relax?
Yoga relaxes me and helps me relieve tension, especially now when we’re practically chained to laptops and desks. I enjoy learning more about music and the history of famous music bands and genres.
What is favourite book?
The Perks of Being a Wallflower - I think I've read it more than 7 times
What is your favourite Arabic film?
Hala2 Lawen (Translation: Where Do We Go Now?) by Nadine Labaki
What is favourite English film?
Mamma Mia
Best piece of advice to someone looking for a career at Google?
If you’re interested in a career at Google, deep dive into the different career paths and pinpoint the space you want to join. When you know your space, you’re likely to identify the skills you need to develop.
