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Airbnb files to go public: Here’s what it says are its 6 biggest risk factors

In a much-anticipated prospectus and SEC filing, home-sharing giant Airbnb offers the deepest look yet into its finances.

Airbnb files to go public: Here’s what it says are its 6 biggest risk factors
[Photo: Airbnb]
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In a huge bet that the global travel industry will one day come roaring back to pre-pandemic life, home-sharing giant Airbnb filed for its initial public offering of stock Monday afternoon.

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The San Francisco-based company said in its much-anticipated S-1 filing and prospectus that it lost $697 million in the first nine months of 2020 as the effects of COVID-19 ate into its business. Revenue for that period was $2.5 billion, down more than 30% from the same period last year.

Airbnb says it will trade on the Nasdaq under the ticker symbol ABNB. Its market debut, expected before the end of 2020, would cap a year of hot tech-focused IPOs that have defied the worst economic crisis in more than a decade. In the filing, the company listed what it considered to be the greatest risks to its business, and not surprisingly, COVID-19 was top of mind.

Here are some of the things it had to say:

  • COVID: “The COVID-19 pandemic and the impact of actions to mitigate the COVID-19 pandemic have materially adversely impacted and will continue to materially adversely impact our business, results of operations, and financial condition.”
  • Elusive profitability: “We have incurred net losses in each year since inception, and we may not be able to achieve profitability.”
  • Attracting hosts: “If we fail to retain existing hosts or add new hosts, or if hosts fail to provide high-quality stays and experiences, our business, results of operations, and financial condition would be materially adversely affected.”
  • Attracting guests: “If we fail to retain existing guests or add new guests, our business, results of operations, and financial condition would be materially adversely affected.”
  • Economic downturn: “Any further and continued decline or disruption in the travel and hospitality industries or economic downturn would materially adversely affect our business, results of operations, and financial condition.”
  • Competition: “The business and industry in which we participate are highly competitive, and we may be unable to compete successfully with our current or future competitors.”

Before the pandemic, Airbnb was valued at more than $30 billion, making it one of the world’s most valuable startups. The company laid off about 25% of its staff in May and has since emphasized its focus on local travel. The IPO filing comes as COVID-19 infections are increasing in some of the company’s hottest markets in the U.S. and Europe, underpinning the extent to which Airbnb’s future is dependent upon the effectiveness and successful distribution of a vaccine.

About the author

Christopher Zara is a senior staff news editor for Fast Company and obsessed with media, technology, business, culture, and theater. Before coming to FastCo News, he was a deputy editor at International Business Times, a theater critic for Newsweek, and managing editor of Show Business magazine

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