AirBNB filed to go public a few weeks ago, and it has been on investors radar ever since. Investors, both new to the game and season vets, are scrambling up cash in preparation for purchasing AirBNB stocks. The recent announcement has even grabbed the attention of Mad Money’s host Jim Cramer.
“Thanks to COVID-19, AirBNB is now the safest way to travel, which is why this IPO might end up being the steal of the century,” he said.
Travelers have been flocking to AirBNB over hotels since the pandemic began, since there is less risk to exposure in another persons home than in a hotel or motel. Swimming pools, elevators, and crowded lobbies have put would-be globe trotters into the hands of the hotel industries largest competitor.
“It pretty much has the market to itself,” he said. “The once-mighty hotel and restaurant industries – and their unions – no longer have the clout to keep AirBNB down.”
Many business have suffered during the pandemic, while others have flourished. Electronic Arts (EA) and Amazon (AMZN) are just a couple examples of increased revenues seen as a result of people staying inside more often.
“It pretty much has the market to itself,”Jim Cramer
“This turns out to be another one of those forever-changed businesses that’s actually benefiting from COVID-19,” he said.
Although, the company is not without its woes.
In May 2020, CEO Brian Chesky said that revenues were set to fall more than 50% this year, forcing him him to la off 1,900 employees (about 25% of his work force).
AirBNB’s bookings have rebounded since then, but were still down 30% in June compared to last year. Revenue also took a tumble about 67% year-over-year to $335 million last quarter, resulting in a $400 million EBITDA loss.
AirBNB has been facing pressure to go public before the end of this year when stock options offered to employees expire. This means a huge amount of tension for those who were promised the ability to cash out.
Chris Lehane, AirBNB’s senior vice president for policy and communications, said in a statement: “We are deeply committed to our employees, and our focus on the long-term has helped build a company that is highly successful and true to our mission and values,”.
He later added that AirBNB was consistently ranked as a great place to work for many reasons, especially “because of the spirit, energy, values and morale of our employees.”
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