- The startup wants to show positive numbers to the investors before going public
- Compared to last year, Airbnb business decreased 80% in China
In spite of Airbnb‘s desire to go public this year, the operator of the largest home-sharing service should only do so in 2021, due to the impact of the coronavirus on its business. The startup’s IPO will likely be delayed as consumers are canceling travel plans, as Bloomberg said so.
Tourism was strongly affected by the spreading of the disease around the globe. Airbnb has been letting guests and hosts cancel reservations in China with no penalty. Compared to last year, Airbnb slashed business by about 80% in the country of the virus’ epicenter.
As the company wants to show positive numbers to the investors before entering the open market, the virus make harder for it to happen this year.
“You want to come in with your best foot forward in a public listing – and this virus is hitting Airbnb hard”David Hsu, professor at the University of Pennsylvania’s Wharton Business School
Airbnb was founded in 2008 and now the company has more than 7 million listings in more than 100,000 cities around the world. On the other hand, before the coronavirus’ outbreak, the startup had already lost money in 2019. Bradley Tusk, former political strategist for Uber Technologies Inc., told Bloomberg that coronavirus can provide a “narrative cover” for Airbnb, but problems comes elsewhere.
“If they were looking for something to blame for the lack of profitability this might actually provide a very convenient excuse”Bradley Tusk, a venture capitalist and former political strategist for Uber Technologies
What complicates even more Airbnb’s debut this year in the public market is the possibility of the Olympic Games getting cancelled because of the virus. If it happens, Professor Arun Sundararajan, an expert on IPOs heard by Bloomberg advises: “It’s not a good idea for them to go public when the outbreak is still underway; there’s too much uncertainly to realistically price the stock.”