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I would have expected them to postpone for sure, given COVID. Does anyone have any ideas on why they didn't postpone? Could it just be them expecting that it'll

I would have expected them to postpone for sure, given COVID. Does anyone have any ideas on why they didn't postpone? Could it just be them expecting that it'll get much worse?

tempsy 6y ago
they got a terrible loan when the market was going crazy in March and now have massive interest payments they’ll have to manage for who knows how long as a cash flow negative business. in short they definitely need capital given how uncertain the travel market remains.
nv-vn 6y ago
I'd imagine that they're in desperate need for more funding, as their valuation will have certainly gone down since the start of the pandemic. One of the big advantages of going public (apart from selling the equity) is that you get easier/lower cost access to loans. I can imagine Airbnb aggressively issuing bonds once they go public in order to stay afloat for the remainder of the pandemic.
gopalv 6y ago
> Does anyone have any ideas on why they didn't postpone? If Airbnb has handed 10 year expiring stock options to core employees, then they're right at the cusp of expiring this year. I would guess it doesn't affect anyone who opted for an 83B early on, but for those who held onto them without exercising them on the pennies might be very unhappy without a 2020 IPO. It feels like a different era now, but this was discussed in detail in late 2019 [1]. The discontent has been exacerbated because Airbnb, which has been valued at $31 billion, doled out two tranches of employee equity that are set to start expiring in November 2020 and in mid-2021; those shares will become worthless if the company is not trading publicly by then, they said. [1] - https://www.nytimes.com/2019/09/20/technology/airbnb-employees-ipo-payouts.html https://www.nytimes.com/2019/09/20/technology/airbnb-employe...
- twblalock 6y ago
  Couldn't they grant new options to the employees whose options expire? An IPO seems like a pretty big hammer for that particular nail.
  - beambot 6y ago
    Granting new options causes tax headaches: If strike price << fair market value, you get taxed immediately on the illiquid gains.
    - refurb 6y ago
      At granting? I get annual option from my $10B+ annual revenue employer (where strike price < current stock price) and I don't pay tax until the options vest and I choose to exercise. Then I just sell-to-cover.
    - twblalock 6y ago
      That depends on the type of options. Some are only taxable at exercise.
- canada_dry 6y ago
  > employee equity that are set to start expiring in November 2020 and in mid-2021; those shares will become worthless if the company is not trading publicly by then I'd say you nailed it on the head. Because aside from this, it's pretty terrible timing for an industry that's been killed by the virus and won't rebound until it's long over.
  - geronb 6y ago
    Not really. Airbnb has fully recovered, same as VRBO (which is growing about 60% YoY) and having proven that the business has been resilient even during the pandemic can be a good story for the IPO. https://www.financial-world.org/news/news/business/6074/california-vacation-rental-airbnb-bookings-pick-up-cross-one-million-on-a-single-day/ https://www.financial-world.org/news/news/business/6074/cali...

I would have expected them to postpone for sure, given COVID. Does anyone have any ideas on why they didn't postpone? Could it just be them expecting that it'll get much worse?

tempsy 6y ago

they got a terrible loan when the market was going crazy in March and now have massive interest payments they’ll have to manage for who knows how long as a cash flow negative business. in short they definitely need capital given how uncertain the travel market remains.

nv-vn 6y ago

I'd imagine that they're in desperate need for more funding, as their valuation will have certainly gone down since the start of the pandemic. One of the big advantages of going public (apart from selling the equity) is that you get easier/lower cost access to loans. I can imagine Airbnb aggressively issuing bonds once they go public in order to stay afloat for the remainder of the pandemic.

gopalv 6y ago

> Does anyone have any ideas on why they didn't postpone? If Airbnb has handed 10 year expiring stock options to core employees, then they're right at the cusp of expiring this year. I would guess it doesn't affect anyone who opted for an 83B early on, but for those who held onto them without exercising them on the pennies might be very unhappy without a 2020 IPO. It feels like a different era now, but this was discussed in detail in late 2019 [1]. The discontent has been exacerbated because Airbnb, which has been valued at $31 billion, doled out two tranches of employee equity that are set to start expiring in November 2020 and in mid-2021; those shares will become worthless if the company is not trading publicly by then, they said. [1] - https://www.nytimes.com/2019/09/20/technology/airbnb-employees-ipo-payouts.html https://www.nytimes.com/2019/09/20/technology/airbnb-employe...

twblalock 6y ago
Couldn't they grant new options to the employees whose options expire? An IPO seems like a pretty big hammer for that particular nail.
- beambot 6y ago
  Granting new options causes tax headaches: If strike price << fair market value, you get taxed immediately on the illiquid gains.
  - refurb 6y ago
    At granting? I get annual option from my $10B+ annual revenue employer (where strike price < current stock price) and I don't pay tax until the options vest and I choose to exercise. Then I just sell-to-cover.
  - twblalock 6y ago
    That depends on the type of options. Some are only taxable at exercise.
canada_dry 6y ago
> employee equity that are set to start expiring in November 2020 and in mid-2021; those shares will become worthless if the company is not trading publicly by then I'd say you nailed it on the head. Because aside from this, it's pretty terrible timing for an industry that's been killed by the virus and won't rebound until it's long over.
- geronb 6y ago
  Not really. Airbnb has fully recovered, same as VRBO (which is growing about 60% YoY) and having proven that the business has been resilient even during the pandemic can be a good story for the IPO. https://www.financial-world.org/news/news/business/6074/california-vacation-rental-airbnb-bookings-pick-up-cross-one-million-on-a-single-day/ https://www.financial-world.org/news/news/business/6074/cali...