• General
  • March 2, 2020
  • 6 minutes read

Will The Coronavirus Outbreak Thwart Airbnb’s Planned IPO?

Airbnb CEO Brian Chesky. Photograph by Kevin Moloney/Fortune Global Forum, under CC BY-NC-ND 2.0 license. The Coronavirus disease (COVID-19) outbreak seems…

Airbnb CEO Brian Chesky.

Photograph by Kevin Moloney/Fortune Global Forum, under CC BY-NC-ND 2.0 license.

The Coronavirus disease (COVID-19) outbreak seems to have taken the world by storm. More than 3,000 deaths globally from the disease have been confirmed so far. Nations around the globe are racing to enact both preventive and managerial measures as regards the virus. First confirmed in Wuhan, China on the 31st of December 2019, COVID-19, as it’s known, has spread to more than 70 countries and territories around the globe, leading to series of emergency quarantines and travel restrictions. Now, this is not to inspire fear, as even amid deaths, have been confirmation of tens of thousands of recoveries [see link] from the virus around the globe. However, caution remains a firm requirement for persons worldwide.

The Coronavirus outbreak has resulted in some unpleasant effects on the global economy. Amid bits of panic and mania, global stock indexes have fallen in value, mainly in China, where the outbreak hit worst and the U.S., a country whose economy is affected to a great deal by business dealings with China. Some companies have even postponed planned public listings due to market instabilities emanating from the outbreak. Others with significant operations in China have been affected by supply chain constraints and fiscal scuffles. One of such is Airbnb, a well-known accommodations marketplace that facilitates more than 2 million lodges daily.

Airbnb is dependent to a great deal on global travel and has definitely encountered some hassles resulting from the Coronavirus outbreak. With travel restrictions being enacted all over the globe, the company has likely lost some good business from that, although that could be temporary or in an opposite case lasting depending on the prospects of the Coronavirus outbreak. Notably, Airbnb, which has long been considered an IPO candidate, announced in September last year that it planned to go public this year. The announcement preceded reports of employees at the company being disgruntled over IPO delays, and Airbnb’s announcement was apparently an assurance to employees that they’ll finally get to reap monetary gains from their stock holdings.

However, not too say with certainty, but Airbnb may eventually delay its planned IPO due to the Coronavirus outbreak not just because of market volatility during this period but also because of business scuffles that may not look good for its financials in the near-term. To draw investors in anticipation of a successful IPO, good financials is a major requirement as well as confidence in the future prospects of a company, and a slowdown isn’t something one would desire in such a case. Also, Airbnb is said to be running significant losses as of late, $306 million in Q1 2019 and $100 million in the second quarter, a situation that wouldn’t be helped by business scuffles.

Who knows, Airbnb may delay its planned IPO to the tail end of this year, or even, next year. One thing that stands, however, is that such a delay wouldn’t rub good with employees who are said to be already disgruntled with long waits. But in a case where such a delay is caused by an occurrence Airbnb had no control over, is there anyone to blame? not really, but is there more reason to be dissatisfied? maybe.

Right now, with no formal clarification, we can only hope that the outbreak doesn’t lead to a further delay of what has been a long-anticipated public debut, even though there’s still some probability that Airbnb’s plan to go public this year could be thwarted.




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