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‘Travel is coming back,’ says Airbnb, as it beats revenue estimates in first earnings

Despite travel grinding to a halt last year, Airbnb says its revenue for the fourth quarter was down only 22% compared to the same period in 2019.

‘Travel is coming back,’ says Airbnb, as it beats revenue estimates in first earnings
[Image: Airbnb; rawpixel]
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In its first earnings report as a publicly traded company, Airbnb delivered a hopeful forecast for the coronavirus-battered travel industry, expressing optimism that people’s appetite for new destinations will grow this year as vaccines begin to finally make a dent in the pandemic.

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“Travel is coming back and we are laser-focused on preparing for the travel rebound,” the company said in its opening statement.

Despite travel grinding to a halt last year, Airbnb says its revenue for the fourth quarter was down only 22% compared to the same period in 2019, a sign of both its “resilience” as a company and its “strong financial discipline,” according to the firm. Airbnb significantly scaled back its business in the middle of the year, laying off about 25% of its staff, doubling down on its core platform, and capitalizing on stir-crazy customers in search of local travel and experiences.

Revenue for the quarter was $859 million, far higher than a Bloomberg consensus estimate of $739.7 million. Revenue for the full year was $3.4 billion, down 30% from the previous year.

Declines in the number of nights booked on Airbnb’s platform were somewhat more dramatic, falling 39% in the fourth quarter to 46.3 million. Perhaps even more dramatic was Airbnb’s fourth-quarter net loss of $3.89 billion, part of which Airbnb attributed to charges related to its IPO in December.

Even as Airbnb proclaimed its focus on the industry’s rebound, it noted that travel in the months ahead will not look like it did before COVID-19 spread throughout the world. “We will see a shift from mass travel to meaningful travel,” the company wrote in a letter to shareholders. “And with more people working from home, there will be more flexibility around where and when they travel.”

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It also cautioned that recovery trends for its business are still impossible to predict, given the uncertainty around how and when the pandemic will play out. “[We] continue to have limited visibility for growth trends in 2021 given the difficulty in determining the pace of vaccine roll-outs and the related impact on willingness to travel,” the company said. “We are not providing an outlook for the rest of 2021 at this time.”

Shares of Airbnb were largely flat in after-hours trading. You can read its full report and letter to shareholders here.

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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  • 12:51 pm

Cryptocurrency moves: Coinbase files to go public after riding the bitcoin rally and doubling revenue

It’s a watershed moment for digital currencies.

Cryptocurrency moves: Coinbase files to go public after riding the bitcoin rally and doubling revenue
[Photo: rawpixel]
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Coinbase, the largest U.S. broker of digital currencies such as bitcoin, litecoin, and ether, is filing to go public in a watershed moment for cryptocurrency.

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According to its Securities and Exchange Commission filing, the exchange platform will offer shares via direct listing on the Nasdaq. Unlike with a traditional IPO, for a direct listing no capital is raised as no shares are created—instead, company investors and employees convert their ownership stake into stock to be sold in the public market.

As Axios reports, Coinbase was recently valued at just over $100 billion in a private market sale, suggesting it could debut as the highest initially valued tech company since Facebook.

The filing follows a transformative year for Coinbase and digital currency as a whole. Once a salmon swimming against the current, cryptocurrency is now poised to go mainstream as major Wall Street institutions, including Bank of New York Mellon and Mastercard, have begun to embrace bitcoin and its peers. Bitcoin in particular, which has become a poster child for cryptocurrency, has enjoyed a triple-digit rally in the last few months, with its price topping $50,000 for the first time last week.

Naturally, Coinbase’s prospects have followed the tides of the cryptocurrency market: The company more than doubled its revenue to $1.1 billion in 2020 amid the bitcoin rally, swinging to a profit of $322 million after posting a net loss the year before. The platform served 43 million users in 2020, according to its filing.

As its public debut moves forward, expect Coinbase’s success to stay tied to that of the broader crypto market. “A majority of our net revenue is derived from transactions in Bitcoin and Ethereum,” the company said in its filing. “If demand for these crypto assets declines and is not replaced by new crypto asset demand, our business, operating results, and financial condition could be adversely affected.”

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  • 7:26 am

GameStop stock is surging again, but Reddit isn’t the reason this time

The stock more than doubled yesterday—the question is, “why?”

GameStop stock is surging again, but Reddit isn’t the reason this time
[Photo: Stephen Zenner/SOPA Images/LightRocket via Getty Images; winvic/iStock]
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For those thinking the GameStop (GME) stock surge was over, think again. GameStop shares have had an incredible 24 hours. Yesterday the stock surged over 103% to $91.71 per share. Will that doubling happen again today? You never know, but things are moving in that direction. As of the time of this writing GameStop shares are up 83% in pre-market trading.

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The big question is, “why?” In January the stock was heavily traded by Redditors on the Reddit board WallStreetBets, sending the previously beleaguered stock into the stratosphere, making retail investors (aka “the little guy”) millions while major hedge funds lost a fortune. That Reddit-powered surge even led to a Congressional hearing on the matter.

But while GameStop’s surge over the last 24 hours no doubt has some Redditors buying in, the main reason for GME’s movement appears to be the fact that the company ousted its Chief Financial Officer Jim Bell, reports CNBC. Bell will resign from GameStop on March 26, and while it has not been confirmed who will take his place, some reports say it will be Ryan Cohen, a GameStop investor and the cofounder of Chewy, a pet e-commerce site.

So is it time to get into GME again? That’s a personal decision. But just remember, if you do decide to jump on the GME bandwagon while the stock is soaring, don’t invest any more than you can afford to lose, because as we’ve seen in the last month, GameStop’s share price can fall as rapidly as it rose.

About the author

Michael Grothaus is a novelist, journalist, and former screenwriter. His debut novel EPIPHANY JONES is out now from Orenda Books. You can read more about him at MichaelGrothaus.com

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Minimum wage stimulus update: What to know about the proposal to hike it to $15

Worker advocates are paying close attention to a proposed increase in the federal minimum wage, but the fate of the plan remains unclear.

Minimum wage stimulus update: What to know about the proposal to hike it to $15
[Photo: Letfluis/iStock]
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All eyes are on the COVID-19 relief plan currently being worked out in Congress, but worker advocates are paying particular attention to one part of it—the proposed new federal minimum wage.

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That dollar amount is hotly debated, not only across the aisle, but within the Democratic party. The disagreement stems from whether the proposed hike to $15 an hour will dissuade some politicians from voting to pass a stimulus package that’s badly needed. Here’s what to understand about this contentious issue:

What is the current rate?

The current federal minimum wage is $7.25 per hour, put in place in July 2009. The previous year it was $6.55 and the year before that, $5.85.; this is the longest the United States has ever gone without raising it. Most states have their own minimum wage law, too. According to the National Conference of State Legislatures, five states have no minimum wage and two have ones that are below the federal one, so those seven abide by the federal amount. Twenty-nine states and Washington, D.C. have minimum wages that are higher than the U.S. government’s.

What’s driving the effort to increase the federal minimum wage?

Chalk it up to income inequality, mainly. The minimum wage rate hasn’t kept up with inflation, so people who earn it are hurting in a way they weren’t when it did keep pace. Experts say that if the rate had kept up with inflation and productivity, workers would be earning a minimum of $24 an hour. And the Democrats proposing it say the move will also help the economy and reward essential workers.

Would it jump to $15 right away?

No. Under the current proposal, it would be raised in increments, hitting $15 in 2025. In 2021, it would rise to $9.50, then a year later to $11, next to $12.50 in 2023, the following year to $14, and finally to $15 in 2025, as outlined in Raise the Wage Act of 2021. An estimated 32 million people would benefit from the hike, according to the Economic Policy Institute.

Will the proposal pass?

Unclear. A decision on whether to include the wage hike as part of the $1.9 trillion stimulus package is expected today. Lawmakers are expected to vote on the package at the end of the week. If the minimum wage proposal is not part of the final package, Biden has suggested he would revive it as a separate piece of legislation at some point in the future.

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IRS Where’s My Refund tool not working for some taxpayers waiting for payments

A tool from the Internal Revenue Service is experiencing technical issues weeks after the start of tax season.

IRS Where’s My Refund tool not working for some taxpayers waiting for payments
[Photo: Stas_V/iStock]
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Eager taxpayers around the country are waiting for their much-needed 2020 refund checks after a delayed start to the tax season, but some are having difficulty using the online tool that let’s them know when they’ll get paid.

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The Internal Revenue Service began accepting returns on February 12, and for taxpayers who have set up direct deposit, refunds could begin to start appearing about three weeks after they file. Where’s My Refund, an online portal where taxpayers can check the status of their payments, has been glitchy or inaccessible for some visitors, with many taking to Twitter to vent their frustrations.

The IRS, for its part, acknowledged that the tool was experiencing issues in a tweet late Monday and has said it’s working to resolve the situation. We’ve reached out to the agency for an update and additional information.

The good news is, the IRS says delays with the tool do not mean that returns themselves have been delayed. In an update on its website, it noted that some visitors to the Where’s My Refund app might see the message “Return Received” even if they’ve already been issued a refund. Unfortunately, it also says people who are waiting for paper refund checks in the mail may have to wait a little bit longer because “It’s taking us longer to process mailed documents.”

The coronavirus pandemic has created additional urgency this year for Americans expecting tax refunds, particularly as many have not been able to rely on other forms of relief from the government. Millions of people lost work in 2020, and despite calls from economists for regular direct payments, Congress has authorized only two stimulus checks so far, with a third one expected in the coming weeks.

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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