Coronavirus jeopardises Airbnb stock market listing
Airbnb’s much-anticipated float could be in danger following the outbreak of the rapidly spreading coronavirus.
Airbnb has been working towards floating on the stock market this year and was looking to start the process in March or April, according to Bloomberg sources. It could now be pushed back as consumers and businesses cancel travel plans in the wake of the coronavirus outbreak.
Airbnb announced last year that it would be ready to make its market debut in 2020, which is expected to be a direct listing. It had been tipped to be one of the few profitable tech firms to launch a stock market listing, following the disappointing initial public offering (IPO) of Uber and Wework’s decision to abandon its float.
Adam Vettese, an analyst at multi-asset investment platform eToro, said: “ It’s worth noting that Airbnb has been relatively relaxed about the timing of its debut on the stock market as it is already a profitable company.”
“Therefore, it wouldn’t be at all surprising to see Airbnb delay its hotly-anticipated IPO until there are signs that the epidemic has been contained and the markets go back to normal. In fact, that could prove to be a sensible move.”
Last month the company reported. a$322m (£248m) loss, down from a $200m profit the year before. It will need to weigh the risks of floating with this backdrop and heightened coronavirus fears.
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Some investors are reportedly concerned that the coronavirus will dent Airbnb’s results in the first half of the year and may bleed into the third quarter, depending on the scale of the outbreak. It gives little time to improve the numbers to support a listing, Bloomberg reported.
Airbnb has reportedly allowed guests and hosts cancel reservations in China, where the virus originated, with no penalty up until 1 April. Bloomberg said this has slashed business in China by approximately 80 per cent, compared with a year ago.
When approached for comment, Airbnb reiterated its statement on the outbreak which it published last week. The company said: “The Coronavirus outbreak is causing travel restrictions and other disruptions that have a direct impact on the travel and tourism sector and beyond.”
“Although nobody can know the extent of the impact that the Coronavirus outbreak may have, we believe that history shows that when global disruptions happen, the travel industry has bounced back in the long run.”
Shares in travel companies and airlines have taken a huge hit since the virus started in Wuhan, China. Airline stocks plunged further this morning after more flights were suspended on the back of growing fears that the virus is spreading further.
Vetesse added: “The worrying thing for those linked with the tourism industry is that there is no end in sight, meaning there could be weeks or even months of disruption ahead.”
British Airways owner IAG was the FTSE 100’s biggest faller, shedding another nine per cent this morning to land at 426.20.
Advisers to over-50s insurer Saga is reported to have halted the sale of one of its travel businesses, Titan.