(Reuters) – Short-term residence rental firm Airbnb Inc is about to rent Morgan Stanley and Goldman Sachs Group Inc as joint lead advisers on its deliberate inventory market flotation subsequent yr, individuals acquainted with the matter stated on Wednesday.
FILE PHOTO: The logos of Airbnb are displayed at an Airbnb occasion in Tokyo, Japan, June 14, 2018. REUTERS/Issei Kato/File Photo
The appointments would symbolize one other excessive-profile task for the storied funding banks, albeit probably much less profitable than typical. This is as a result of Airbnb is leaning towards going public by means of a direct listing, relatively than an preliminary public providing (IPO), sources have stated.
In an IPO, shares are bought by the corporate or its buyers in a course of managed by the funding banks as underwriters. In a direct listing, nevertheless, no new shares are bought, and the position of the funding banks is extra of 1 advising on market circumstances, as opposed to underwriting.
As a outcome, corporations can save on the funding banking charges they pay by means of a direct listing.
Airbnb is contemplating going public across the center of 2020, one of many sources stated, a timeline that may assist it keep away from any inventory market volatility within the run-up to the U.S. presidential election in November of subsequent yr.
The sources requested anonymity to converse concerning the deal and cautioned that the plans are nonetheless topic to change. Airbnb, Morgan Stanley and Goldman Sachs declined to remark.
Airbnb stated final month it deliberate to turn out to be a publicly listed firm in 2020, marking it out as one of many largest names to pursue a inventory market float subsequent yr.
Airbnb was valued at $31 billion in its most up-to-date personal fundraising spherical, in accordance to knowledge supplier PitchBook. The firm bought shares within the personal market earlier this yr at a valuation of roughly $35 billion across the time it bought HotelTonight, Vox reported.
Shares are buying and selling within the personal market at a worth that values Airbnb at round $46 billion, sources stated, cautioning that such skinny buying and selling volumes can inflate the worth.
By comparability, Hilton Worldwide Holdings Inc and Marriott International Inc have market capitalizations of round $26 billion and $40 billion, respectively.
With a direct listing, Airbnb would comply with the route taken by music streaming firm Spotify Technology SA and office messaging agency Slack Technologies Inc in 2018 and 2019, respectively. Shares of Spotify and Slack have traded down round 23% and 39%, respectively, since going public.
Morgan Stanley, Goldman Sachs and Allen & Co have been the three funding banks that suggested on each the Spotify and Slack listings.
Slack anticipated to pay $22.1 million in charges to its three monetary advisers. By comparability, the greater than two dozen banks on the 2017 IPO of Snap Inc, which was value about $31 billion on the time of its public listing, earned a complete of $85 million in commissions.
An Airbnb listing subsequent yr would comply with a combined 2019 for tech listings, with the likes of Uber Technologies and Lyft Inc struggling since going public. Earlier this week, WeWork’s dad or mum, The We Company, additionally filed to withdraw its IPO after buyers raised considerations about its burgeoning losses and the tight grip of its co-founder on its governance.
Airbnb took in additional than $1 billion in income for the second quarter of 2019, the second time it exceeded that degree in its decade-plus historical past, the corporate stated final month. It gave no particulars on profitability.
Last month, Airbnb stated that as of Sept. 15, its hosts had earned greater than $80 billion by sharing their houses and areas on the app, and as of June 1, it had collected over $1.6 billion in transient occupancy taxes.
It additionally stated it handed a milestone of getting greater than 7 million Airbnb listings in over 100,000 cities all over the world.
Reporting by Joshua Franklin in New York and Anirban Sen in Bangalore; Editing by Matthew Lewis and Christian Schmollinger