Airbnb is the Godot of IPOs. After teasing us with the idea of a listing for years, the San Francisco-based unicorn finally took the plunge and filed to go public on Monday.
The company, who’ll sign Nasdaq’s guest book under the ticker ABNB, is hurtling towards one of the largest IPOs of 2020. The billion-dollar listing tells the tale of the comeback kid: a buzzy 2008 startup forced to face the perils of not one, but two global recessions and a pandemic, emerging from all three with the buoyancy of confidence.
Airbnb's listing documents tell a different story: one of a company shouldering the weight of risks beyond its control. The company's S-1 filing reveals it lost close to $700 million in the first nine months of this year – twice the amount it lost during the same period in 2019.
Although the pandemic hurled Airbnb's finances into an abyss, it turns out the company has been sauntering cliff-side for a while
A large number? Yes. Surprising? No. The rental industry, along with the rest of the hospitality sector, has nosedived its way through 2020. The cascade of cancellations brought on by the pandemic-induced travel slump dragged Airbnb’s bookings in Europe and Beijing down by, at one point, 80 per cent and 96 per cent respectively.
In response, Airbnb toned up. In May, it cut 25 per cent of its workforce, froze its marketing budget and slashed executives’ salaries in half. All three co-founders ceded their salaries to help stem the bleeding.
And it worked. The comeback kid rebounded with a better-than-expected Q3. But nine months of financial haemorrhaging can’t be patched up by one quarter’s results. As Airbnb said in it’s filing documents: “the impact of actions to mitigate the Covid-19 pandemic… will continue to materially adversely impact our business.”
Although the pandemic hurled Airbnb’s finances into an abyss, it turns out the company has been sauntering cliff-side for a while. Airbnb’s listing documents reveal its revenue growth has been in a steady decline for the last three years, with expectations growth will continue to slow in the future.
The dimly lit path to stable, quarter-on-quarter profitability is fraught with more difficulties yet. Airbnb is in debt to the tune of $2 billion. This level of indebtedness makes the company more vulnerable to sagging economic conditions, with the IPO filing suggesting Airbnb isn’t entirely sure it will be able to sustain the cash flow required to meet interest and principal payments in the future.
Other risks are also peppered throughout Airbnb’s S-1 filing, perhaps the most notable being alleged anti-competitive antics by Google. The rental giant accuses Google of playing favorites, prioritising its own travel products – Google Travel and Google Vacation Rentals – over Airbnb’s. This preferential treatment fogs up Airbnb’s search engine visibility, leading to less website traffic. Airbnb warns it might have to ramp up its marketing budget to compensate for the loss.
Light at the end of the tunnel
Compared to others, Airbnb's skating through the pandemic on a golden scooter, clutching dollar bills and a sign that says 'survived Covid'
At first glance, the smattering of risk factors in Airbnb’s IPO documents piece together a bleak picture. But the plucky company that once revolutionised short-term renting still has some juice left in the tank.
For one, it’s the best-performing company in 2020’s worst-performing sector. In Q3, Marriot’s revenue fell 57 per cent, Hilton’s slumped 61 per cent, and Expedia's revenue sank 58 per cent. Compared to this, Airbnb’s skating through the pandemic on a golden scooter, clutching dollar bills and a sign that says “survived Covid.”
Airbnb also has the luxury of agility. Throughout the pandemic, the company has been perched on its toes, ready to dart one way and then the other as coronavirus cases rise and fall in quick succession. The company’s saving grace during the pandemic was its quick pivot to domestic rentals. “People wanted to get out of their homes and yearned to travel, but they did not want to go far,” the listing document says, “Domestic travel quickly rebounded on Airbnb.”
So, equipped with a resilient business plan and a leadership that knows how to shimmy around coronavirus, Airbnb has a narrative that’s more optimistic than other fallen soldiers of the travel industry.
The golden bullet in Airbnb’s monster IPO, though, is its perfect timing. Pfizer and Moderna’s race to roll out a Covid vaccine has brought with it a renewed optimism about the future of global travel. This is good news for Airbnb’s traditional, international home-sharing business plan.
The alternative isn’t so bad, either. In the worst-case scenario, neither Pfizer nor Moderna release a vaccine, local lockdowns continue to spring up, people carry on working remotely and – most importantly – there’s an increased demand in local getaways to pave over the cracks in international travel. This is good news for Airbnb’s new domestic home-sharing business plan.
So it’s no wonder, despite the grab bag of risks it’s toting around, Airbnb’s blockbuster listing continues to drum up enthusiasm and woo investors: it’s a no downside bet. This year’s frothy IPO season might just be seeing it’s most exciting debutante yet.
Annia Mirza is the founder and editor of the legal newsletter 'Legit'
Director: Laxman Utekar
Cast: Vicky Kaushal, Akshaye Khanna, Diana Penty, Vineet Kumar Singh, Rashmika Mandanna
Rating: 1/5
Cases of coronavirus in the GCC as of March 15
Saudi Arabia – 103 infected, 0 dead, 1 recovered
UAE – 86 infected, 0 dead, 23 recovered
Bahrain – 210 infected, 0 dead, 44 recovered
Kuwait – 104 infected, 0 dead, 5 recovered
Qatar – 337 infected, 0 dead, 4 recovered
Oman – 19 infected, 0 dead, 9 recovered
COMPANY%20PROFILE
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Monster Hunter: World
Capcom
PlayStation 4, Xbox One
Killing of Qassem Suleimani
THE APPRENTICE
Director: Ali Abbasi
Starring: Sebastian Stan, Maria Bakalova, Jeremy Strong
Rating: 3/5
MATCH INFO
Qalandars 112-4 (10 ovs)
Banton 53 no
Northern Warriors 46 all out (9 ovs)
Kumara 3-10, Garton 3-10, Jordan 2-2, Prasanna 2-7
Qalandars win by six wickets
INDIA'S%20TOP%20INFLUENCERS
%3Cp%3E%3Cstrong%3EBhuvan%20Bam%3C%2Fstrong%3E%3Cbr%3E%3Ca%20href%3D%22https%3A%2F%2Fwww.instagram.com%2Fbhuvan.bam22%2F%3Fhl%3Den%22%20target%3D%22_self%22%3EInstagram%3C%2Fa%3E%20followers%3A%2016.1%20million%3Cbr%3EBhuvan%20Bam%20is%20a%2029-year-old%20comedian%20and%20actor%20from%20Delhi%2C%20who%20started%20out%20with%20YouTube%20channel%2C%20%E2%80%9CBB%20Ki%20Vines%E2%80%9D%20in%202015%2C%20which%20propelled%20the%20social%20media%20star%20into%20the%20limelight%20and%20made%20him%20sought-after%20among%20brands.%3Cbr%3E%3Cstrong%3EKusha%20Kapila%3C%2Fstrong%3E%3Cbr%3E%3Ca%20href%3D%22https%3A%2F%2Fwww.instagram.com%2Fkushakapila%2F%3Fhl%3Den%22%20target%3D%22_self%22%3EInstagram%3C%2Fa%3E%20followers%3A%203.1%20million%3Cbr%3EKusha%20Kapila%20is%20a%20fashion%20editor%20and%20actress%2C%20who%20has%20collaborated%20with%20brands%20including%20Google.%20She%20focuses%20on%20sharing%20light-hearted%20content%20and%20insights%20into%20her%20life%20as%20a%20rising%20celebrity.%3Cbr%3E%3Cstrong%3EDiipa%20Khosla%3C%2Fstrong%3E%3Cbr%3E%3Ca%20href%3D%22https%3A%2F%2Fwww.instagram.com%2Fdiipakhosla%2F%3Fhl%3Den%22%20target%3D%22_self%22%3EInstagram%3C%2Fa%3E%20followers%3A%201.8%20million%3Cbr%3EDiipa%20Khosla%20started%20out%20as%20a%20social%20media%20manager%20before%20branching%20out%20to%20become%20one%20of%20India's%20biggest%20fashion%20influencers%2C%20with%20collaborations%20including%20MAC%20Cosmetics.%3Cbr%3E%3Cstrong%3EKomal%20Pandey%3Cbr%3E%3C%2Fstrong%3E%3Ca%20href%3D%22https%3A%2F%2Fwww.instagram.com%2Fkomalpandeyofficial%2F%3Fhl%3Den%22%20target%3D%22_self%22%3EInstagram%3C%2Fa%3E%20followers%3A%201.8%20million%3Cbr%3EKomal%20Pandey%20is%20a%20fashion%20influencer%20who%20has%20partnered%20with%20more%20than%20100%20brands%2C%20including%20Olay%20and%20smartphone%20brand%20Vivo%20India.%3Cbr%3E%3Cstrong%3ENikhil%20Sharma%3C%2Fstrong%3E%3Cbr%3E%3Ca%20href%3D%22https%3A%2F%2Fwww.instagram.com%2Fnikkkhil%2F%3Fhl%3Den%22%20target%3D%22_self%22%3EInstagram%3C%2Fa%3E%20followers%3A%201.4%20million%3Cbr%3ENikhil%20Sharma%20from%20Mumbai%20began%20his%20online%20career%20through%20vlogs%20about%20his%20motorcycle%20trips.%20He%20has%20become%20a%20lifestyle%20influencer%20and%20has%20created%20his%20own%20clothing%20line.%3Cbr%3E%3Cem%3ESource%3A%20Hireinfluence%2C%20various%3C%2Fem%3E%3Cbr%3E%3C%2Fp%3E%0A
Greatest of All Time
Starring: Vijay, Sneha, Prashanth, Prabhu Deva, Mohan
THE SPECS
Engine: 3.5-litre supercharged V6
Power: 416hp at 7,000rpm
Torque: 410Nm at 3,500rpm
Transmission: 6-speed manual
Fuel consumption: 10.2 l/100km
Price: Dh375,000
On sale: now
Ferrari 12Cilindri specs
Engine: naturally aspirated 6.5-liter V12
Power: 819hp
Torque: 678Nm at 7,250rpm
Price: From Dh1,700,000
Available: Now
The specs
Engine: Four electric motors, one at each wheel
Power: 579hp
Torque: 859Nm
Transmission: Single-speed automatic
Price: From Dh825,900
On sale: Now
Iran's dirty tricks to dodge sanctions
There’s increased scrutiny on the tricks being used to keep commodities flowing to and from blacklisted countries. Here’s a description of how some work.
1 Going Dark
A common method to transport Iranian oil with stealth is to turn off the Automatic Identification System, an electronic device that pinpoints a ship’s location. Known as going dark, a vessel flicks the switch before berthing and typically reappears days later, masking the location of its load or discharge port.
2. Ship-to-Ship Transfers
A first vessel will take its clandestine cargo away from the country in question before transferring it to a waiting ship, all of this happening out of sight. The vessels will then sail in different directions. For about a third of Iranian exports, more than one tanker typically handles a load before it’s delivered to its final destination, analysts say.
3. Fake Destinations
Signaling the wrong destination to load or unload is another technique. Ships that intend to take cargo from Iran may indicate their loading ports in sanction-free places like Iraq. Ships can keep changing their destinations and end up not berthing at any of them.
4. Rebranded Barrels
Iranian barrels can also be rebranded as oil from a nation free from sanctions such as Iraq. The countries share fields along their border and the crude has similar characteristics. Oil from these deposits can be trucked out to another port and documents forged to hide Iran as the origin.
* Bloomberg
The Bio
Name: Lynn Davison
Profession: History teacher at Al Yasmina Academy, Abu Dhabi
Children: She has one son, Casey, 28
Hometown: Pontefract, West Yorkshire in the UK
Favourite book: The Alchemist by Paulo Coelho
Favourite Author: CJ Sansom
Favourite holiday destination: Bali
Favourite food: A Sunday roast
Killing of Qassem Suleimani
COMPANY PROFILE
Name: HyperSpace
Started: 2020
Founders: Alexander Heller, Rama Allen and Desi Gonzalez
Based: Dubai, UAE
Sector: Entertainment
Number of staff: 210
Investment raised: $75 million from investors including Galaxy Interactive, Riyadh Season, Sega Ventures and Apis Venture Partners
The specs
Engine: 5.0-litre supercharged V8
Transmission: Eight-speed auto
Power: 575bhp
Torque: 700Nm
Price: Dh554,000
On sale: now
Jeff Buckley: From Hallelujah To The Last Goodbye
By Dave Lory with Jim Irvin
UAE currency: the story behind the money in your pockets
if you go
The flights
Air France offer flights from Dubai and Abu Dhabi to Cayenne, connecting in Paris from Dh7,300.
The tour
Cox & Kings (coxandkings.com) has a 14-night Hidden Guianas tour of Guyana, Suriname and French Guiana. It includes accommodation, domestic flights, transfers, a local tour manager and guided sightseeing. Contact for price.
Terminator: Dark Fate
Director: Tim Miller
Starring: Arnold Schwarzenegger, Linda Hamilton, Mackenzie Davis
Rating: 3/5
It Was Just an Accident
Director: Jafar Panahi
Stars: Vahid Mobasseri, Mariam Afshari, Ebrahim Azizi, Hadis Pakbaten, Majid Panahi, Mohamad Ali Elyasmehr
Rating: 4/5
Roger Federer's record at Wimbledon
Roger Federer's record at Wimbledon
1999 - 1st round
2000 - 1st round
2001 - Quarter-finalist
2002 - 1st round
2003 - Winner
2004 - Winner
2005 - Winner
2006 - Winner
2007 - Winner
2008 - Finalist
2009 - Winner
2010 - Quarter-finalist
2011 - Quarter-finalist
2012 - Winner
2013 - 2nd round
2014 - Finalist
2015 - Finalist
2016 - Semi-finalist
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
UAE currency: the story behind the money in your pockets
The%20specs
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What are the main cyber security threats?
Cyber crime - This includes fraud, impersonation, scams and deepfake technology, tactics that are increasingly targeting infrastructure and exploiting human vulnerabilities.
Cyber terrorism - Social media platforms are used to spread radical ideologies, misinformation and disinformation, often with the aim of disrupting critical infrastructure such as power grids.
Cyber warfare - Shaped by geopolitical tension, hostile actors seek to infiltrate and compromise national infrastructure, using one country’s systems as a springboard to launch attacks on others.
Tearful appearance
Chancellor Rachel Reeves set markets on edge as she appeared visibly distraught in parliament on Wednesday.
Legislative setbacks for the government have blown a new hole in the budgetary calculations at a time when the deficit is stubbornly large and the economy is struggling to grow.
She appeared with Keir Starmer on Thursday and the pair embraced, but he had failed to give her his backing as she cried a day earlier.
A spokesman said her upset demeanour was due to a personal matter.
Global state-owned investor ranking by size
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Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
Hamilton’s 2017
Australia - 2nd; China - 1st; Bahrain - 2nd; Russia - 4th; Spain - 1st; Monaco - 7th; Canada - 1st; Azerbaijan - 5th; Austria - 4th; Britain - 1st; Hungary - 4th; Belgium - 1st; Italy - 1st; Singapore - 1st; Malaysia - 2nd; Japan - 1st; United States - 1st; Mexico - 9th
UAE currency: the story behind the money in your pockets
The National in Davos
We are bringing you the inside story from the World Economic Forum's Annual Meeting in Davos, a gathering of hundreds of world leaders, top executives and billionaires.
The%20specs
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