Air of Caution
However, the response to Airbnb’s stock market debut will be a bit cautious, considering the unimpressive post-IPO performance of some of the tech startups that went public recently, including ride-hailing platforms Uber (UBER) and Lyft (LYFT). More recently, the postponement of the WeWork IPO, amid concerns over funding issues and mounting losses, took the sheen off the still-buoyant IPO market. While Uber, Lyft and Slack (WORK) are trading below their IPO prices, others like Pinterest (PINS) and Zoom (ZM) made decent gains since their debut.
Considering the travel app’s moderate brand value, it will have to work hard to keep pace with competitors like Booking.com. Like most American e-commerce platforms, Airbnb is making inroads into the Chinese market as part of its expansion plan. The company’s long-term prospects in the Asian country will depend on its ability to effectively comply with the local rules and stay resilient to the macroeconomic uncertainties. It also needs to tackle competition from local accommodation-sharing portals like Xiaozhu.
Mixed Mood
A section of market watchers is bullish about Airbnb’s prospects as a public company, considering its relatively strong financial background that increases the chances of a near-term turnaround. A report from the company recently said it generated about $1 billion in revenue in the second quarter.
Valuation
As per the most recent estimate, Airbnb is valued at $31 billion. Earlier, co-founder Brian Chesky had ruled out going public in the current year. In all likelihood, Airbnb will go for a direct listing.
The company, which was founded in 2008, has long been doing the groundwork to prepare itself for the public listing – by strengthening the management team and pursuing strategic acquisitions, with the latest being the addition of global online marketplace Urbandoor.