AirBnb

🧠 Free Recall ❓ Quiz 🔍 Cues 🔮 Simulation 🥷 ShadowBox 📐 Encode Cards

But the Wall Street Journal reported Tuesday that Airbnb’s valuation has plummeted from $31 billion at its fundraising a couple of years ago to $18 billion at its $1 billion financing disclosed Monday.

Then word came Wednesday from The Information that Airbnb’s revenue is projected to fall some 54 percent to around $2.2 billion this year. Airbnb CEO Brian Chesky had already told employees that he expects to chop $800 million from the company’s marketing spend in 2020.

The deal is comprised of $1 billion in five-year debt yielding 11% to 12% and warrants that can convert into stock equating to a little over 1% of Airbnb’s total equity, the sources said. They requested anonymity as the terms are confidential.

The deal raised Airbnb’s cash reserves to around $4 billion

Pressure to IPO

Airbnb employees have long been pushing executives to press ahead with an initial public offering (IPO) because stock options granted to seasoned staff start to expire in November 2020. Those shares could be worthless if the platform is not trading on the public market.

"We grow GBV by attracting new guests to book stays and experiences on our platform and through past guests who return to our platform to make new bookings. We attract most guests to Airbnb directly or through unpaid channels. During the nine months ended September 30, 2020, approximately 91% of all traffic to Airbnb came organically through direct or unpaid channels, reflecting the strength of our brand. We have also used paid performance marketing, for example on search terms including “Airbnb,” to attract guests. Our strategy is to increase brand marketing and use the strength of our brand to attract more guests via direct or unpaid channels and to decrease our performance marketing spend relative to 2019." - S1

Read: https://mail.google.com/mail/u/0/#inbox/FMfcgxwKjTVSVhdlJsNfhDVkfPggvcxD

Unstarred

Dunk (exclude from study)

AirBnb

Review Questions

Todos

Sensemaker