One of the most anticipated public listings of 2020 is in danger of being derailed by the spread of the coronavirus.
Airbnb Inc., operator of the largest home-sharing service, has been working toward a stock market debut this year and was looking to start the process around March or April, people with knowledge of the matter said. That kickoff could get pushed back, some of them said. And now, with consumers and businesses canceling travel plans around the globe, Airbnb’s plan is at risk of slipping into 2021.
“You want to come in with your best foot forward in a public listing – and this virus is hitting Airbnb hard,” said David Hsu, a professor at the University of Pennsylvania’s Wharton Business School.
The company has to weigh the risks of entering the public markets after an unprofitable year, when investors have already been burned by the poor performance of other technology public offerings -- and when the travel sector is under so much pressure, Hsu said. “I wouldn’t be surprised to see this particular listing delayed,” he added.
In 2017 and 2018, Airbnb made a profit, before interest, taxes, depreciation and amortization. Last year, the company lost money on that basis -- and that was before the coronavirus emerged, according to people close to the company.
Some investors, including a handful of Airbnb backers and would-be buyers of the shares on the public markets, are concerned that the virus will dent Airbnb’s results in the first half of 2020 and may also bleed into the third quarter, depending on how the virus spreads. That will leave little time in the rest of the year for the numbers to improve to support a listing, these investors said. They asked not to be identified discussing sensitive issues.
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