News & Insights

Home » News & Insights » Airbnb to recertify all listings ahead of planned IPO

Airbnb to recertify all listings ahead of planned IPO

Finance and Securities, Other, Real Estate Developments

Airbnb announced this week that the firm will check all of its listings to make sure that photos, addresses, and other information are accurate by the end of next year. The move is seen as a response to the death of five people at an Airbnb “party house” on October 31, as well as in anticipation of the firm’s initial public offering. [1]

Unlike WeWork, another major real estate startup, Airbnb has been profitable for years and also has a sizeable pile of cash (more than $3 billion) in case of trouble. Airbnb believes public markets will be willing to invest in a more stable and proven venture—notwithstanding the high-profile problems of other companies operating in the same sector. At bottom, Airbnb simply has a much less risky business model than WeWork’s, which depended on long-term leases. [2]

However, the FT reports that Airbnb is leaning toward a direct listing when the company goes public, cutting out investment bank underwriters from the process and also limiting secondary market activity that allows employees that allows employees to get loans against their stock options.

With more than two million nightly users, Airbnb has transformed the hotel and tourism industries since it was founded in 2008. It has also reshaped real estate markets in popular tourist cities like Athens and Lisbon, where property prices have exploded. Critics of the firm’s business model argue the company has eaten into residential housing stock and made such cities unaffordable for locals, while defenders of Airbnb point to the infusion of tourist dollars from visitors looking to stay in more homely accommodations (as opposed to hotel rooms). Regardless of Airbnb’s long-term impact on urban landscapes, the company’s runaway success over the last decade suggests its $42 billion IPO should be a big win for one of the biggest stories in real estate since the 2008 crash.

[1] Yaffe-Bellany, D. ( Airbnb to Verify All Listings, C.E.O. Chesky Says from NY Times https://www.nytimes.com/2019/11/06/business/airbnb-verify-listings.html?te=1&nl=dealbook&emc=edit_dk_20191107?campaign_id=4&instance_id=13674&segment_id=18589&user_id=a4abfc839163b57428a32471c8b72195&regi_id=6329426120191107 Accessed November 8 2019

[2] Kruppa, M. (November 2019) Investors seek to cash in on Airbnb from FT https://www.ft.com/content/55a444ba-0057-1https://www.ft.com/content/55a444ba-0057-11ea-b7bc-f3fa4e77dd471ea-b7bc-f3fa4e77dd47 Accessed November 8 2019

Recent Posts

Impact of Shorter COVID-19 Quarantine on Workplaces

On Monday, the CDC announced changes to its recommended isolation and quarantine time from 10 days to 5 days for asymptomatic people with COVID-19. They recommend that people leaving isolation after 5 days continue to wear a mask for the following 5 days. The CDC also...

Restaurants Sue Over Vaccine Mandate

Restaurant operators sued Mayor Bill de Blasio and New York City over Key to NYC, the new indoor vaccine mandate program, on August 17-the same day the mandate went into effect. A group of restaurants in Staten Island, through the Independent Restaurant Owners...

Financial Regulators’ New Target: Social Media Influencers and SPACs

The Financial Industry Regulatory Authority (“FINRA”) will conduct three new regulatory sweeps in an effort to combat various activities causing extreme fluctuations in the financial markets. FINRA has chosen to target special purpose acquisition companies (“SPACs”),...

Does WARN Apply to Virus Closures?

Enterprise, in Benson et al. v. Enterprise Leasing Co. of Florida LLC et al., has tried to argue that the Worker Adjustment and Retraining Notification Act (“WARN”), through its natural disaster exception, does not apply to closures caused by COVID-19. Two Florida...