Airbnb IPO Launch Date and Expected Share Price

[Sharon1014]

Launch date appears set for December 10.  Expected share price $44-50.  The company has also submitted an amended S-1 filing to the SEC yesterday which you can see here (and nope, I'm not trawling through all 350 pages of it to play "spot the difference" 😀, will leave that to the finance journos and market analysts)

S-1/A (sec.gov)

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[Bradford17]

I was on support today, and 3 other times this week, and they confirmed I am eligible and will be receiving the invite yet from Morgan Stanley, however it appears from this thread that may not be the case. I have only received 1 email per the program and enrolled immediately. The widely varying experience and lack of consistency  from hosts that are eligible is certainly confusing. Is anyone else in a similar situation? Did anyone receive the Morgan Stanley instructions as late as today Friday December 4th?

With only 3 business days left before the IPO I certainly hope Airbnb can manage this the right way. The train is not going back to the station at this point. 

[Ann72]

@Bradford17  To answer your second question, I got the Morgan Stanley instructions on December 1st.  I completed the application today and e-signed my tax forms.  I then got an email from Morgan Stanley stating, "Please be advised that your Morgan Stanley account for participation in the Airbnb [sic] has been approved and is now open."

[Sharon1014]

@Ann72   😀  That's always a bit of worry isn't it when the wording is off.  Like someone kinda careless just dashed off a quickie generic response and sent it out en masse without bothering to actually read what they wrote (and yeah we do that here sometimes, but it's a forum so we have an excuse 😋) but when it's supposed to be a professional outfit, and they are communicating about important financial information, those kind of things just make me scratch my head.

[Sarah977]

@Sharon1014 @Ann72  Proofreaders seem to have gone the way of the dodo.

[Ann72]

@Sharon1014 @Sarah977  It just tells me that there's a lot of rushing and chopping and changing behind the scenes.  All of these outfits have excellent proofreaders - it's possibly a more important job at a financial services company than it is at a publishing house, because a decimal in the wrong place could wreak havoc.  Here it's a sign that things are being rushed.  And I don't know what THAT says.  🤔🙄

[Bradford17]

Thanks Ann I greatly appreciate it. We are very unclear where we stand even with tier 2 support stating this afternoon, "I can confirm. That you are eligible and will receive a phone call/email from Morgan Stanley."

Fingers crossed.

[Sharon1014]

Let us know what happens with that please @Bradford17 .  Am sure there are other US hosts also wondering if there will in fact be any follow up next week.

[Michelle53]

This is how a typical IPO works. 

Generally, one starts with an account at a broker who has access to the IPO shares.  Not all brokers have access to IPO shares. 

If the broker has access to IPO shares, one has to apply to purchase, before a certain deadline, to indicate interest i.e. the number of shares one is interested in purchasing.   

One's application is approved/not approved based on the rules of the IPO. 

Even if one's application is approved, it's still just an application until the shares are officially priced, and the actual number of available shares is determined. 

Once the shares are officially priced, and the number is determined, the broker allocates the number of shares across the number of successful applications, based the amount of interest in the program, and their own criteria, and then extends an offer to purchase, and one is given a period of time to accept the offer, after which time the offer expires. 

One could get the number one asks for, a reduced number, or zero.  There is never a guarantee of obtaining any number of IPO shares. 

In the case of the Airbnb IPO, eligibility is not a guarantee of an invitation to apply, and even

if one is invited to apply, and successfully creates an account,  this is not a guarantee of receiving any particular number of IPO shares. 

It has been posted in CC that the program was closed on December 2nd,  due to being fully subscribed.   That means the number of shares that applicants indicated they would like to purchase has approached or exceeded the estimated total available. 

It remains to be seen how many shares folks will be offered to purchase after the actual pricing has been announced, and whether they will all be taken up. 

[Sharon1014]

A breakdown of who owns what stock, voting rights, etc.  Heard on the grapevine that Catherine Powell has 39,000+ shares of Class B stock (unconfirmed)

• Airbnb has four classes of shares. Class B holders will have 81.7% of the outstanding capital stock and hold 99% of the voting power.
• Company directors, execs, and 5% stockholders will beneficially own 49.1% of outstanding capital stock with 58.8% of the voting power.

Airbnb updates terms to seek $2.6B in IPO (Pending:ABNB) | Seeking Alpha

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[Ute42]

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@Sharon1014 

You've published Your post and 2 minutes later You've got my kudo. I think I've just outperformed everyone else. That's what I'd call a real follower.

[Carol215]

Hi all ,I did get both e-mails.  The MS one did not allow me to set up an acct.  When I finally got in...all shares were spoken for already.  So I did some homework. How is it that a private company who owns no real estate or much of anything tangible can be so in debt? Yes ,on the books it is making huge $$ but it also is taking huge losses!  

[Sharon1014]

@Carol215   This is how - several reasons

The company has been investing big-time in China, selling out the data integrity of our China host friends in the process  (big mistake imo, given the geo-political risks in the region)  Airbnb exec resigned over concerns company shared ... - Airbnb Community (withairbnb.com)

Brian has been blowing loads of cash on unrelated projects that have nothing to do with the core business. Brian "likes big splashy things" Exclusive: Behind Airbnb's bet on show business to hook travelers | Article [AMP] | Reuters

ABNB has been spending big as a gamble against future revenue using host money that should be held in escrow to do it. Airbnb is HIDING A Mountain of DEBT And Not Paying Hosts - YouTube . The UK FCA has been investigating the company for money laundering and counter-terrorism issues, and has identified that the company had not ring-fenced host money as it should have Financial Conduct Authority probes Airbnb links to criminal cash | Business | The Sunday Times (thet... .

ABNB have not been paying hosts monies due and it looks like this has occurred deliberately in order to show a profit in Q3 for the IPO (when every other year for the last 7 years, the company has lost around $0.5 billion a year) Solved: Payout issues - Airbnb Community (withairbnb.com)  or this one  A family in Chile has got nothing to eat - Airbnb Community (withairbnb.com) or this one Re: Issues with payments - no help from Airbnb sup... - Airbnb Community (withairbnb.com)

ABNB withheld at least $50m of the $250m EC Host Relief Fund from distribution.  It may have been more like $150m depending on how you interpret the word "primarily" and some of these funds may have in fact gone to guests not hosts, since guests are "customers" too.  Here's the relevant bit from the S-1, buried in the financials appendix on F57, and that's another 57 pages after you've trawled through the 350 pg prospectus itself

These payments are accounted for as consideration paid to a customer and as such, are expected to result in a reduction to revenue. Under this policy, the Company recorded $204.4 million of payments, primarily for hosts, in its consolidated statement of operations for the nine months ended September 30, 2020.

ABNB made a "miraculous" profit of $219m in Q3 2020, just in time for the IPO.  At whose expense I wonder?  Do hosts really want to invest in a company that behaves this way?

There's more of course, but this is just a summary of the primary causes of the company's financial problems.

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[Michelle53]

@Sharon1014  There's one line item that doesn't reflect GAAP accounting (Generally Accepted Accounting Principles).  "ABNB have not been paying out host monies due"

Profit is, at most basic, defined as Revenue minus Cost. 

Revenue is money made from hosting fees and guest fees. If GAAP is followed, money collected on behalf of hosts would be accounted for on the Balance Sheet - in the on-hand cash balance (and possibly in an account called something like "host payment accruals", since they are supposed to be paid right out again).

Holding onto hosts' money wouldn't impact profitability, since it isn't on the Profit and Loss Statement. More likely, the increase in profitability is due to more people travelling after a substantial number of staff and contractors had  been laid off, and marketing spend cut.  

If Airbnb was holding onto hosts' money, it would be seen in the cash position, and the liability balances, not revenue. 

But one would have to carefully study the financial statements.  No company preparing to open its financials to the world would allow such a situation to occur. 

[Carol215]

I will continue, earlier today my post was blocked so I did a quick trial now.  I have been a host for 6yrs and have seen many changes to my ability to host using ABNB. The company has made a lot of money off of our backs, I am not so sure about the future with them. On the plus side they have STRONG name recognition. Its a tough call . I will watch and see what happens in the next 6-8 weeks before I invest. Broker fees aren't that expensive. taking a loss by purchasing early IS expensive. Morgan Stanley/ ABNB thanks, I have to wait anyway. 

[Sarah977]

"ABNB made a "miraculous" profit of $219m in Q3 2020, just in time for the IPO.  At whose expense I wonder?  Do hosts really want to invest in a company that behaves this way?"

I've never owned stocks, I'm not a investor, at least not for anything that carries any risk (I do have Canadian govt. bonds, which pay a low rate of interest, but are secure) , but if I did invest, I would want to only do so for "ethical investments". Airbnb definitely doesn't qualify as ethical. 

@Sharon1014