As Airbnb prepares for its stock market debut in December, it has revealed for the first time just how much the coronavirus pandemic has affected its business.
The company filed for an IPO and revealed that it incurred losses of around $700 million on revenues of $2.5 billion from January to September this year.
Airbnb: What is an IPO?
According to Investopedia, an initial public offering or IPO is the “process of offering shares of a private corporation to the public in a new stock issuance. Public share issuance allows a company to raise capital from public investors. The transition from a private to a public company can be an important time for private investors to fully realize gains from their investment as it typically includes share premiums for current private investors. Meanwhile, it also allows public investors to participate in the offering”.
According to Airbnb’s IPO, the company was facing a crisis in revenue growth way before the pandemic came and decimated an already staggering global economy. According to Financial Times, the company has also suggested that its heydays may have passed considering that by 2019, it had experienced its third subsequent year of slowing growth.
“We believe that our SEO results have been adversely affected by the launch of Google Travel and Google Vacation Rental Ads,” the IPO filing read to explain why Airbnb’s Experiences which pairs local guides with tourists is unable to grow as much as the company would like it to, “which reduce the prominence of our platform in organic search results for travel-related terms and placement on Google”.
According to Livemint, the company had “a net loss of $697 million on revenue of $2.5 billion for that nine-month period, compared with a net loss of $323 million on revenue of $3.7 billion for the same period last year”.
In related news, Airbnb welcomed its first Bollywood hosts – Gauri Khan and Shah Rukh Khan as they opened their New Delhi home on Airbnb. In homage to Shah Rukh’s signature pose from over 30 years of Bollywood superstardom, the “Home with Open Arms” campaign will give residents of India a chance to stay in the Khan family’s genteel home.
(Header credits: Gauri Khan in her Delhi Home – Airbnb ‘Home with Open Arms’)