Sometime this month, Airbnb will go public. Despite uncertainly about the company’s immediate prospects given worldwide travel restrictions, the founders will launch an initial public offering (IPO) to raise around $4 million USD.
Part of that process means filing a “risk register” with the US Securities and Exchange Commission (SEC). In it, the company lays out all the things threatening its business.
It’s an eye-blurringly long document, but here are the main things Airbnb is afraid of:
- Adversely affect SEO performance as Google pushes competing products, Google Travel and Google Vacation Rentals
- Airbnb hosts “cross-listing” their properties on competing platforms
- European mayors – in 22 cities – seeking to ban or strictly regulate Airbnb
- Claims and litigation relating to fatalities, shootings, other violent acts, illness (including COVID-19), cancellations and refunds, personal injuries, property damage, carbon monoxide incidents, and privacy violations
- The ongoing coronavirus pandemic, causing guests and hosts to become unwilling to share spaces
- Political uncertainty, like Brexit
- Natural disasters
That’s a lot of worries. Nevertheless, many factors are beyond the company’s control and will negatively impact competitors in equal measure.
Of course, disrupting housing markets comes with risks. Namely, that governments and citizens are inclined to fight rising rents.
“We are subject to a wide variety of complex, evolving, and sometimes inconsistent and ambiguous laws and regulations,” reads Airbnb’s prospectus.
In 2019, Airbnb posted $6 billion in revenue. Currently, the company’s fully diluted valuation is up to $35 billion. Shares will be priced between $56 and $64 CDN.
The big question is: will public investors bank on Airbnb’s current results or post-vaccine potential?