• 19 days Could Crypto Overtake Traditional Investment?
  • 24 days Americans Still Quitting Jobs At Record Pace
  • 26 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 29 days Is The Dollar Too Strong?
  • 29 days Big Tech Disappoints Investors on Earnings Calls
  • 30 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 32 days China Is Quietly Trying To Distance Itself From Russia
  • 32 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 36 days Crypto Investors Won Big In 2021
  • 36 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 37 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 39 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 40 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 43 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 44 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 44 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 46 days Are NFTs About To Take Over Gaming?
  • 47 days Europe’s Economy Is On The Brink As Putin’s War Escalates
  • 50 days What’s Causing Inflation In The United States?
  • 51 days Intel Joins Russian Exodus as Chip Shortage Digs In
Is The Real Estate Boom On Its Last Legs?

Is The Real Estate Boom On Its Last Legs?

A super hot real estate…

What Does Tesla's Million-Mile Battery Mean For Green Energy?

What Does Tesla's Million-Mile Battery Mean For Green Energy?

Tesla’s million-mile electric vehicle battery…

Energy CEOs See Big Payouts Despite Oil Price Crash

Energy CEOs See Big Payouts Despite Oil Price Crash

The COVID-19 pandemic has hit…

  1. Home
  2. Investing
  3. Other

Airbnb IPO Under Threat As China's Economy Drags

Airbnb IPO

The coronavirus outbreak in China could derail Airbnb Inc.'s attempt to going public in the next several quarters. It's a race against time for the online marketplace that arranges lodging, as slumping financials have led to steep losses and risks, a valuation correction. 

Airbnb has taken notice of WeWork's implosion last fall, as it attempted to IPO but failed because of valuations concerns, ran out of cash several months later, and had to be bailed out by its largest investor, SoftBank. 

WeWork has been a barometer of the VC and IPO bubble; all have deflated in the last five months. 

A source told The Wall Street Journal that Airbnb recorded a $322 million net loss for the nine months through September, down from a $200 million profit a year earlier. 

Investors with direct knowledge of the company said diminishing profitability could affect the company in obtaining a listing. 

The new demand on Wall Street is a dash out of junk and into value, which means the era of growth stocks could be coming to an end. 

Airbnb's valuation in its last funding round in 2017 was $31 billion, but there's concern among the sources that today's valuation could be significantly less. 

Just look at what happened to Casper last week when it priced the IPO - the lost at least half of its value from the last funding round. 

One person close to the company told the Journal that the coronavirus could delay the IPO because its Chinese segment is entirely down.  Related: Armed Troops Storm El Salvador’s Parliament

Mainland China is a significant growth driver for Airbnb, but with two-thirds of the country's economy shut down, it has become a drag. 

Another source told the Journal that Airbnb could IPO in Q3. Several months before, it would file the needed paperwork with the Securities and Exchange Commission to go public.

Airbnb's slumping profitability is creating concern within the management, sources said, though they added it has $3 billion in cash on its balance sheet. 

By Zerohedge.com

More Top Reads From Safehaven.com:

Back to homepage

Leave a comment

Leave a comment