Airbnb files for IPO with US regulators

Airbnb has announced it will go public after it filed confidentially for its initial public offering (IPO), despite market concerns over the economic impact of the coronavirus pandemic.

The short-term letting platform had initially planned to list earlier this year, but its plans appeared to be put on hold amid the fallout from the Covid-19 crisis that took hold in March.

Learn everything you need to know about the Airbnb IPO

News of Airbnb filing confidential registrations documents with the US Securities and Exchange Commission (SEC) is a major step forward for the company’s IPO process.

‘The number of shares to be offered and the price range for the proposed offering have not yet been determined,’ Airbnb said in a statement.

‘The initial public offering is expected to take place after the SEC completes its review process, subject to market and other conditions.’

If the company manages to complete its IPO this year it will become one of the largest listings in 2020.

In April, Airbnb raised $2 billion from investors, with the capital raise valuing the business at $18 billion. That figure is much lower than the $26 billion valuation the short-term letting platform gave itself internally.

The discrepancy between those two figures, however, is likely a reflection of the impact the Covid-19 crisis has had on trade and the business overall.

Airbnb IPO revived by US market recovery

Investors are likely excited by Airbnb joining the pipeline of companies looking to go public in the coming months, with the IPO market revived by US stocks steady recovery since crashing in March.

In August, the S&P 500 finally returned to pre-crisis levels, with the index closing at 3374 points on Tuesday and up 3% year-to-date.

The news has given investors and companies renewed confidence, with Airbnb and other members of the travel industry being hit particularly hard by lockdown measures and travel restrictions, forcing it to trim staff by 25%.

When the company announced it will reduce its headcount its CEO Brian Chesky admitted that the decision was made due to a lack of certainty over when travel would return to normal.

‘While we know Airbnb's business will fully recover, the changes it will undergo are not temporary or short-lived,’ he said.

Some parts of the travel industry, including Airbnb, have shown signs of recovering from the impact of the coronavirus pandemic, with shares in online travel agency Booking Holdings up 7% in August.

Airlines like British Airways owner IAG, along with rivals easyJet and Ryanair have also seen shares rebound this month, though the threat of travel restrictions tightening further has weighed on their respective share prices.

Did you know you can trade Airbnb ahead of its IPO with IG?

IG will be offering a ‘grey market’ before the IPO is held, enabling you to speculate on Airbnb's share price before it lists. Our grey market price will be based on our prediction of Airbnb’s market cap at the end of its first trading day.

With a grey market, you can:

• ‘Buy’ if you think the market cap will be higher than the grey market price.
• ‘Sell’ if you think the market cap will be lower than the grey market price.

After the IPO

Once Airbnb has listed, there will be two ways you can get exposure to the company:

• Go long or short on its share price by spread betting and CFD trading.
• Buying and owning its shares via share dealing.