Airbnb files to go public, turned a profit last quarter

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Brian Chesky, CEO of Airbnb
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Airbnb on Monday released its prospectus to debut on public markets. The company allows users to book short-term rentals and experiences while traveling.

The company made $219 million in net income on revenues of $1.34 billion last quarter. That was down nearly 19% from $1.65 billion in revenue a year prior. Despite primarily turning net losses, the company has had other occasional quarters of profitability, including the second and third quarters of 2018 and the third quarter of 2019.

The company said it plans to trade under the symbol “ABNB” on the Nasdaq.

The company reported a net loss of $674 million in 2019 on revenues of $4.81 billion. Thus far in 2020, the company has turned a net loss of nearly $697 million on revenues of $2.52 billion. The decline is likely from the impact of the coronavirus, which put the brakes on leisure and business travel earlier this year.

“The Covid-19 pandemic and the impact of actions to mitigate the Covid-19 pandemic have materially adversely impacted and will continue to materially adversely impact our business, results of operations, and financial condition,” the company listed as its first risk factor.

Airbnb has endured a tough 2020. As the coronavirus decimated travel around the world, the company raised $2 billion in new debt funding at a valuation of $18 billion and announced major cost-cutting initiatives, including plans to lay off 25% of its staff, or nearly 1,900 employees. The company also slashed marketing costs and raised billions of dollars in debt.

The coronavirus pandemic brought the travel industry to a halt, resulting in an estimated $443 billion of lost revenue since the beginning of March, according to a Nov. 5 report from the U.S. Travel Association.

Airbnb rebounded, however, after a surge of rentals in rural areas as residents with means fled pandemic-stricken cities. 

The company, however, has endured numerous issues with its hosts since enforcing an extenuating circumstances policy in March that overrode hosts’ cancelation policies and claimed to offer full refunds to guests impacted by the coronavirus pandemic. 

Later, Airbnb announced it would establish a $250 million coronavirus relief fund for hosts, returning 25% of what they would have normally received under their cancellation policies, but many hosts who spoke with CNBC complained that they were not receiving the correct amounts or any payments at all. 

In November, the company was hit with a proposed class-action lawsuit by one of its hosts, alleging that the tech company violated its contract with hosts when it enforced the extenuating circumstances policy. 

A Global Asset Management Seoul Korea Magazine

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