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'
COMPANY PROFILE
● Company: Bidzi
● Started: 2024
● Founders: Akshay Dosaj and Asif Rashid
● Based: Dubai, UAE
● Industry: M&A
● Funding size: Bootstrapped
● No of employees: Nine
Ticket prices
- Golden circle - Dh995
- Floor Standing - Dh495
- Lower Bowl Platinum - Dh95
- Lower Bowl premium - Dh795
- Lower Bowl Plus - Dh695
- Lower Bowl Standard- Dh595
- Upper Bowl Premium - Dh395
- Upper Bowl standard - Dh295
Scoreline
Al Wasl 1 (Caio Canedo 90 1')
Al Ain 2 (Ismail Ahmed 3', Marcus Berg 50')
Red cards: Ismail Ahmed (Al Ain) 77'
UAE currency: the story behind the money in your pockets
Ferrari
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Kamindu Mendis bio
Full name: Pasqual Handi Kamindu Dilanka Mendis
Born: September 30, 1998
Age: 20 years and 26 days
Nationality: Sri Lankan
Major teams Sri Lanka's Under 19 team
Batting style: Left-hander
Bowling style: Right-arm off-spin and slow left-arm orthodox (that's right!)
Global Fungi Facts
• Scientists estimate there could be as many as 3 million fungal species globally
• Only about 160,000 have been officially described leaving around 90% undiscovered
• Fungi account for roughly 90% of Earth's unknown biodiversity
• Forest fungi help tackle climate change, absorbing up to 36% of global fossil fuel emissions annually and storing around 5 billion tonnes of carbon in the planet's topsoil
What the law says
Micro-retirement is not a recognised concept or employment status under Federal Decree Law No. 33 of 2021 on the Regulation of Labour Relations (as amended) (UAE Labour Law). As such, it reflects a voluntary work-life balance practice, rather than a recognised legal employment category, according to Dilini Loku, senior associate for law firm Gateley Middle East.
“Some companies may offer formal sabbatical policies or career break programmes; however, beyond such arrangements, there is no automatic right or statutory entitlement to extended breaks,” she explains.
“Any leave taken beyond statutory entitlements, such as annual leave, is typically regarded as unpaid leave in accordance with Article 33 of the UAE Labour Law. While employees may legally take unpaid leave, such requests are subject to the employer’s discretion and require approval.”
If an employee resigns to pursue micro-retirement, the employment contract is terminated, and the employer is under no legal obligation to rehire the employee in the future unless specific contractual agreements are in place (such as return-to-work arrangements), which are generally uncommon, Ms Loku adds.
Mohammed bin Zayed Majlis
ELIO
Starring: Yonas Kibreab, Zoe Saldana, Brad Garrett
Directors: Madeline Sharafian, Domee Shi, Adrian Molina
Rating: 4/5
The five pillars of Islam
1. Fasting
2. Prayer
3. Hajj
4. Shahada
5. Zakat
RESULTS
6.30pm Al Maktoum Challenge Round-2 – Group 1 (PA) $49,000 (Dirt) 1,900m
Winner RB Frynchh Dude, Pat Cosgrave (jockey), Helal Al Alawi (trainer)
7.05pm Al Bastakiya Trial – Conditions (TB) $50,000 (D) 1,900m
Winner El Patriota, Vagner Leal, Antonio Cintra
7.40pm Zabeel Turf – Listed (TB) $88,000 (Turf) 2,000m
Winner Ya Hayati, Mickael Barzalona, Charlie Appleby
8.15pm Cape Verdi – Group 2 (TB) $163,000 (T) 1,600m
Winner Althiqa, James Doyle, Charlie Appleby
8.50pm UAE 1000 Guineas – Listed (TB) $125,000 (D) 1,600m
Winner Soft Whisper, Frankie Dettori, Saeed bin Suroor
9.25pm Handicap (TB) $68,000 (T) 1,600m
Winner Bedouin’s Story, Frankie Dettori, Saeed bin Suroor
'Morbius'
Director: Daniel Espinosa
Stars: Jared Leto, Matt Smith, Adria Arjona
Rating: 2/5
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
More from Rashmee Roshan Lall
Ferrari 12Cilindri specs
Engine: naturally aspirated 6.5-liter V12
Power: 819hp
Torque: 678Nm at 7,250rpm
Price: From Dh1,700,000
Available: Now
Juvenile arthritis
Along with doctors, families and teachers can help pick up cases of arthritis in children.
Most types of childhood arthritis are known as juvenile idiopathic arthritis. JIA causes pain and inflammation in one or more joints for at least six weeks.
Dr Betina Rogalski said "The younger the child the more difficult it into pick up the symptoms. If the child is small, it may just be a bit grumpy or pull its leg a way or not feel like walking,” she said.
According to The National Institute of Arthritis and Musculoskeletal and Skin Diseases in US, the most common symptoms of juvenile arthritis are joint swelling, pain, and stiffness that doesn’t go away. Usually it affects the knees, hands, and feet, and it’s worse in the morning or after a nap.
Limping in the morning because of a stiff knee, excessive clumsiness, having a high fever and skin rash are other symptoms. Children may also have swelling in lymph nodes in the neck and other parts of the body.
Arthritis in children can cause eye inflammation and growth problems and can cause bones and joints to grow unevenly.
In the UK, about 15,000 children and young people are affected by arthritis.
Killing of Qassem Suleimani
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Company%20profile
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FIXTURES
Thu Mar 15 – West Indies v Afghanistan, UAE v Scotland
Fri Mar 16 – Ireland v Zimbabwe
Sun Mar 18 – Ireland v Scotland
Mon Mar 19 – West Indies v Zimbabwe
Tue Mar 20 – UAE v Afghanistan
Wed Mar 21 – West Indies v Scotland
Thu Mar 22 – UAE v Zimbabwe
Fri Mar 23 – Ireland v Afghanistan
The top two teams qualify for the World Cup
Classification matches
The top-placed side out of Papua New Guinea, Hong Kong or Nepal will be granted one-day international status. UAE and Scotland have already won ODI status, having qualified for the Super Six.
Thu Mar 15 – Netherlands v Hong Kong, PNG v Nepal
Sat Mar 17 – 7th-8th place playoff, 9th-10th place playoff
