Topline: With 2019 turning out to be a big year for initial public offerings, one of next year’s most hotly anticipated IPOs, Airbnb, already has substantial funding and is likely to debut on the public markets through a direct listing, CNBC first reported.
Crucial quote: “Our large shareholders, most of our large investors, have told us they intended to hold the stock for a long time and they actually were doing the opposite of pressuring us to go public,” Chesky said in the CNBC interview. “We think next year will be the right time for us.”
Tangent: Two big banks, Morgan Stanley and Goldman Sachs, are poised to become the lead advisors on Airbnb’s probable direct listing, according to CNBC. Both banks were also involved in the direct listings for music-streaming platform Spotify in 2018 and workplace-messaging app Slack in 2019. Since their listings, Spotify’s shares are down 8% and Slack’s almost 44%.
What to watch for: Big-name tech startups haven’t exactly fared well in the IPO market this year. Uber and Lyft’s shares, for instance, are down 35% and 44%, respectively, since going public. Another overhyped unicorn, WeWork, canceled its IPO plans after significant concerns from investors about the company’s business model and corporate governance. Airbnb CEO Chesky recently said that WeWork’s failure taught him two lessons—the importance of profit margins and reputation. It remains to be seen whether Airbnb, which said it was profitable on an EBITDA basis in 2018, can attract interest in the market.