Sunday, March 1, 2020

Silicon Valley's Highly Anticipated 2020 IPO - airbnb

Frank Cardia is a licensed financial advisor and the owner of Blue Sky Financial. An experienced venture capital investor, Frank Cardia has assisted in over $1 billion worth of funding for companies including airbnb.

The expected 2020 IPO of airbnb is turning out to be one of the most anticipated in Silicon Valley, for a number of reasons. One of these is the company's global reach. Since its inception in 2008, the company that allows homeowners to earn extra cash by renting out their rooms has built an impressive inventory of 7 million properties around the world. By comparison, Marriott International, the world’s largest hotel chain, has 1.4 million rooms.

Another reason is that, according to the company itself, airbnb makes money. The company has said that it posted a positive EBITDA (earnings before interest, tax, depreciation, and amortization) in 2017 and 2018. This is in sharp contrast to some of 2019’s tech IPO companies like Uber and Lyft, which generate huge losses yearly.

A private firm, airbnb is not obligated to reveal information on its earnings, so there is no conclusive way to confirm statements made by airbnb. However, it has not raised capital in private markets since its last raise in 2017 that valued it at $31 billion, and CEO Brian Chesky has said that the company has enough cash to run even without the IPO. This has further fueled speculation that the company will opt for a direct listing on a stock exchange where, instead of issuing new shares to the public, existing shares will be listed, thereby allowing current shareholders to sell to the public.