Iyo Iwata Management Says Airbnb Weighs up Direct Listing Over an Initial Public Offering
San Francisco based Airbnb Inc., the world’s largest online property listings marketplace is starting the process to launch the company on the public markets by 2020. Iyo Iwata Management researchers noted that the company was weighing up its options whether to have a direct listing or the traditional initial public offering.
In the last few years more technology start-up companies have chosen the traditional route of an IPO in order to raise funds through public markets, however some of the new generation technology firms have already gathered private funds in order to expand their business but still allow its employees and investors an easy exit strategy to cash out.
With a direct listing, it enables a company to lower the amount of capital they need to pay towards investment banks and underwriting fees. They will not be opting to issue new shares nor need to raise more capital, instead let the market decide a price for the company.
Notable companies such as Slack Technologies an American software company and Spotify Technology, a media-services provider both took the direct listing route.
“Choosing an IPO would mean that Airbnb would need to open its books to its investors, with a current private valuation of around $31 billion U.S. Dollars, it will be one of the most high profile listings set for next year”. commented Mr Hashi Seiichi, Research Director at Iyo Iwata Management.
Iyo Iwata Management noted that Airbnb officially announced in September that they were planning to go ahead with a public listing in 2020 submitted via a press release. There were no additional details specifying whether they intended to file for an Initial Public Offering or take a direct listing route.
With a robust financial position, the company boasted more than $1 billion U.S. Dollars in revenue with earnings being both positive in 2017 and 2018.
The company still has major hurdles to solve such as outstanding regulatory issues that have arisen in its biggest markets such as cities like Paris and New York where the business model of short term rentals is facing scrutiny.
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