Illustration: Aïda Amer/Axios
Airbnb has restarted internal conversations about going public in 2020, something unthinkable just a month ago, per multiple sources close to the company.
The big picture: Stock markets are no longer moored to macroeconomic conditions or financial performance, and IPOs are riding the tsunami.
For Airbnb, which hasn't made any formal decisions yet, the math is twofold:
1. The universe of IPO issuers is expanding.
- Not only are established, profitable companies like Warner Music Group finding success, but so are money-losing, VC-backed tech companies like ZoomInfo and Vroom (which priced last night above range).
- As further evidence of banker bullishness, insure-tech upstart Lemonade yesterday filed its S-1, despite growing losses and less than $100 million in 2019 revenue.
- Lemonade's pitch will be "stay private shorter," offering the possibility of private-market returns to public-market investors. It also will be a test case for the $100 million revenue threshold, which had been considered tech IPO gospel in recent years.
- IPO investors are often giving issuers a mulligan for recent performance, instead using 2019 results to model out past 2021. For Airbnb, this means it could go public in late Q3 without being dinged too badly for its Q1 or Q2 results.
2. The travel and hospitality sectors are showing green shoots.
- Airline capacity remains well below pre-pandemic levels, but it is showing modest improvement. And their stocks are soaring.
- Airbnb CEO Brian Chesky told Bloomberg that his company had more U.S. bookings between May 17 and June 3, including the Memorial Day weekend, than it did for the same period in 2019. He also said there was an increase in longer stays, perhaps reflective of people wanting to work from (a different) home.
- A company spokesperson declined to comment on IPO plans.
The bottom line: The coronavirus hasn't gone away. In fact, infection rates and hospitalizations are accelerating in several states. But public equity markets have largely stopped caring, which is unexpectedly good news for companies like Airbnb.
Go deeper: Airbnb cuts 25% of workforce