Airbnb's IPO bets on a post-pandemic future

In filing for a $1 billion stock offering Monday, Airbnb is betting investors will look past the company's coronavirus-induced struggles and see a brighter future.

Between the lines: Airbnb faces pressure to go public despite the pandemic so it can deliver liquidity both to investors and to early employees, whose options will eventually expire.

The big picture: Airbnb was losing money but growing quickly until the pandemic hit early this year. COVID took a tremendous toll on the company, especially in March, as cancellations outpaced bookings.

Yes, but: While the broader travel industry is still reeling, Airbnb has partly recovered by providing a market for those looking for a nearby getaway or even just a more scenic backdrop to do remote work and school.

• "Airbnb IPO is the perfect market hedge," Box CEO and tech gadfly Aaron Levie tweeted. "If you believe the vaccine is coming quickly, people want to travel again. If you don't believe it's coming quickly, people want to work remotely in different locations longer."

Yes, but: Airbnb could face another rough period if the current explosion of coronavirus cases leads to a second round of widespread lockdowns.

• Any wave of cancellations puts Airbnb in a difficult and costly position as it tries to be flexible with travelers' needs while not leaving hosts high and dry, either.

By the numbers:

• Airbnb has raised approximately $6.4 billion from venture capital and private equity firms. It was valued at $31 billion in a late 2017 round, but that fell to only $18 billion when the company secured an emergency equity and debt round in the pandemic's early days.
• In its filing, Airbnb reports a nearly $700 million net loss on $2.5 billion in revenue for the first nine months of 2020, versus a $322 million net loss on $3.7 billion in revenue for the year earlier period.
• But it also reports $219 million in profits for the third quarter of 2020, as bookings rebounded.

• It's unclear whether Airbnb plans to raise around $1 billion, or if that's just a placeholder figure that will be fleshed out more in an amended filing.

Of note: Airbnb has carved out the rare niche in travel that doesn't rely heavily on advertising to generate bookings.

• The company noted in the filing that roughly 91% of its traffic came through direct or unpaid channels in the nine months ending Sept. 30.
• However, in a section Airbnb probably hopes gets noticed by regulators, the company added, "We believe that our SEO results have been adversely affected by the launch of Google Travel and Google Vacation Rental Ads," which it said has hurt its prominence in organic Google search results.

Why it matters: How Airbnb's stock offering fares this winter will be one good indicator of whether investors think the U.S. economy is stuck in a COVID-dug ditch or ready to take vaccine-powered flight.