London Daily

Focus on the big picture.
Wednesday, Oct 01, 2025

Airbnb could save the IPO market...in 2020

Airbnb could save the IPO market...in 2020

It's not easy being a unicorn. Peloton flopped. Uber has struggled and WeWork put its IPO on ice. Still, there are hopes that Airbnb, the red hot home sharing company, can change the story for unicorns. But it doesn't plan to debut until next year.

Silicon Valley may encourage unicorns to grow for growth's sake. Wall Street is far less forgiving.

The recent flops of Peloton (PTON) and SmileDirectClub (SDC) in their trading debuts, the market struggles for Uber (UBER), Lyft (LYFT) and Slack (WORK) and the shelving of the controversial WeWork initial public offering show that companies need profitable business models and not just sales growth and vague aspirational goals to succeed in the public markets.

Now, market experts are wondering if Airbnb, the red-hot home sharing company that is currently valued at $35 billion, can change the story for unicorns.

The company recently said it plans to begin trading on Wall Street in 2020 - most likely through a direct listing like the ones Slack and Spotify (SPOT) did, as opposed to a traditional sale of stock in an IPO.


Airbnb to the rescue

Airbnb has a lot going for it that could make it a better stock than other unicorns. For one, CEO Brian Chesky is highly respected and hasn't made any headlines for establishing a wacky corporate culture like WeWork, or Uber when Travis Kalanick was in charge.

The company also has a deeper management bench that is ready to handle the rigors of being a public company.

Last November, Airbnb hired Dave Stephenson, who had worked for Amazon (AMZN) for 17 years, as its chief financial officer.
He most recently had been the vice president and CFO of Amazon's Worldwide Consumer Organization, the unit that oversaw all of Amazon's global retail sites as well as separate divisions like Zappos and Whole Foods.

At Airbnb, Stephenson joined another prominent Amazon alumnus - Greg Greeley, who ran the Prime subscription service before becoming Airbnb's president of homes in March 2018

The company recently reported revenue of more than $1 billion for the second quarter, and has reportedly generated positive earnings before interest, taxes, depreciation and amortization (EBITDA).

In theory, that puts Airbnb closer to an actual profit, and the possiblity that it could have a successful offering next year.
That would be a big leap over recent offerings.

"WeWork's planned IPO turned into a highly publicized debacle that suggested public investors may finally be done overpaying for blazing-fast growth," said analysts at Renaissance Capital, a firm that specializes in IPO research and manages two IPO ETFs, in a report.

Even an established company like Endeavor Group, the Hollywood talent agency and owner of the UFC mixed martial arts sports league run by Ari Emanuel, had to shelve its offering after first cutting its size and share price. Endeavor was profitable in 2018, but it lost money in 2016 and 2017 and in the first half of 2019.

Katie Nixon, chief investment officer with Northern Trust Wealth Management, said in a report that the IPO market's recent problems reflect "a renewed and rational lack of exuberance for high valuations in venture capital, and highlights that investors are still paying attention to fundamentals."

"We're not seeing the IPO window closed yet but the market is finicky. There may be more direct listings, but it will take companies with a strong profile like Airbnb to do them," said Michael Lin, director of accounting & transaction services at MorganFranklin Consulting.


Unicorn meltdown but don't count out all IPOs

Investors may be shunning mega-unicorns like Uber and Slack but they have flocked to companies in hot sectors such as cloud security and software.

Lin pointed to Datadog (DDOG) and Cloudflare (NET) as two recent offerings that have held up better than other, more buzzy IPOs, although both stocks were down Tuesday. Investors have continued to flock to plant-based protein maker Beyond Meat (BYND) and web conferencing company Zoom Video (ZM) as well.

John Mullins, an associate professor of management practice in marketing and entrepreneurship at London Business School, said he remains optimistic about Airbnb's chances for success, because of its market-leading position and stronger financial position.

Still, some experts think investors should remain extremely cautious when investing in startups.

"We are seeing a beginning of a correction, a back-to-sanity moment," said Megan Bent, managing partner at venture capital firm Harbinger Ventures. "Vision alone is not enough to overcome weakness on the bottom line - and revenue growth alone can't overcome weak corporate governance."

Bent said her firm has eschewed hot tech unicorns in favor of smaller, private consumer products makers, such as feminine hygiene products maker Cora, subscription wine service Vinebox and organic baby food company Once Upon a Farm, which was co-founded by actress Jennifer Garner.

Dev Kantesaria, founder and portfolio manager of Valley Forge Capital Management, said that he, too, believes investors shouldn't chase high-profile Silicon Valley unicorns when there are plenty of profitable market leaders out there.

"I'm generally not a fan of money-losing IPOs. It's a dangerous place to invest," Kantesaria said. He has bought only two high-profile IPOs during the past few decades: the 2006 debut of MasterCard (MA), and Visa (V), which defied the odds with a successful IPO in the midst of the 2008 bear market.

Newsletter

Related Articles

0:00
0:00
Close
Trump Administration Launches “TrumpRx” Plan to Enable Direct Drug Sales at Deep Discounts
Trump Announces Intention to Impose 100 Percent Tariff on Foreign-Made Films
Altman Says GPT-5 Already Outpaces Him, Warns AI Could Automate 40% of Work
Singapore and Hong Kong Vie to Dominate Asia’s Rising Gold Trade
Trump Organization Teams with Saudi Developer on $1 Billion Trump Plaza in Jeddah
Manhattan Sees Surge in Office-to-Housing Conversions, Highest Since 2008
Switzerland and U.S. Issue Joint Assurance Against Currency Manipulation
Electronic Arts to Be Taken Private in Historic $55 Billion Buyout
Thomas Jacob Sanford Named as Suspect in Deadly Michigan Church Shooting and Arson
Russian Research Vessel 'Yantar' Tracked Mapping Europe’s Subsea Cables, Raising Security Alarms
New York Man Arrested After On-Air Confession to 2017 Parents’ Murders
U.S. Defense Chief Orders Sudden Summit of Hundreds of Generals and Admirals
Global Cruise Industry Posts Dramatic Comeback with 34.6 Million Passengers in 2024
Trump Claims FBI Planted 274 Agents at Capitol Riot, Citing Unverified Reports
India: Internet Suspended in Bareilly Amid Communal Clashes Between Muslims and Hindus
Supreme Court Extends Freeze on Nearly $5 Billion in U.S. Foreign Aid at Trump’s Request
Archaeologists Recover Statues and Temples from 2,000-Year-Old Sunken City off Alexandria
China Deploys 2,000 Workers to Spain to Build Major EV Battery Factory, Raising European Dependence
Speed Takes Over: How Drive-Through Coffee Chains Are Rewriting U.S. Coffee Culture
U.S. Demands Brussels Scrutinize Digital Rules to Prevent Bias Against American Tech
Ringo Starr Champions Enduring Beatles Legacy While Debuting Las Vegas Art Show
Private Equity’s Fundraising Surge Triggers Concern of European Market Shake-Out
Colombian President Petro Vows to Mobilize Volunteers for Gaza and Joins List of Fighters
FBI Removes Agents Who Kneeled at 2020 Protest, Citing Breach of Professional Conduct
Trump Alleges ‘Triple Sabotage’ at United Nations After Escalator and Teleprompter Failures
Shock in France: 5 Years in Prison for Former President Nicolas Sarkozy
Tokyo’s Jimbōchō Named World’s Coolest Neighbourhood for 2025
European Officials Fear Trump May Shift Blame for Ukraine War onto EU
BNP Paribas Abandons Ban on 'Controversial Weapons' Financing Amid Europe’s Defence Push
Typhoon Ragasa Leaves Trail of Destruction Across East Asia Before Making Landfall in China
The Personality Rights Challenge in India’s AI Era
Big Banks Rebuild in Hong Kong as Deal Volume Surges
Italy Considers Freezing Retirement Age at 67 to Avert Scheduled Hike
Italian City to Impose Tax on Visiting Dogs Starting in 2026
Arnault Denounces Proposed Wealth Tax as Threat to French Economy
Study Finds No Safe Level of Alcohol for Dementia Risk
Denmark Investigates Drone Incursion, Does Not Rule Out Russian Involvement
Lilly CEO Warns UK Is ‘Worst Country in Europe’ for Drug Prices, Pulls Back Investment
Nigel Farage Emerges as Central Force in British Politics with Reform UK Surge
Disney Reinstates ‘Jimmy Kimmel Live!’ after Six-Day Suspension over Charlie Kirk Comments
U.S. Prosecutors Move to Break Up Google’s Advertising Monopoly
Nvidia Pledges Up to $100 Billion Investment in OpenAI to Power Massive AI Data Center Build-Out
U.S. Signals ‘Large and Forceful’ Support for Argentina Amid Market Turmoil
Nvidia and Abu Dhabi’s TII Launch First AI-&-Robotics Lab in the Middle East
Vietnam Faces Up to $25 Billion Export Loss as U.S. Tariffs Bite
Europe Signals Stronger Support for Taiwan at Major Taipei Defence Show
Indonesia Court Upholds Military Law Amid Concerns Over Expanded Civilian Role
Larry Ellison, Michael Dell and Rupert Murdoch Join Trump-Backed Bid to Take Over TikTok
Trump and Musk Reunite Publicly for First Time Since Fallout at Kirk Memorial
Vietnam Closes 86 Million Untouched Bank Accounts Over Biometric ID Rules
×