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Airbnb is going to become public, despite struggling with the pandemic

Airbnb on Wednesday filed preliminary paperwork for selling stock on Wall Street, undaunted by a global pandemic that has taken some wind out of its home-sharing business.

The San Francisco-based company said it submitted a draft registration statement to the Securities and Exchange Commission. It kept details in the statement confidential.

Airbnb said the number of shares in the company it plans to sell and their price had not yet been determined. The timing of the IPO also has not been set.

Airbnb, founded 12 years ago, has long been expected to go public. Its CEO, Brian Chesky, told the Associated Press this summer that he was working on the IPO documents when the coronavirus pandemic hit the US in March.

The pandemic initially hurt demand for the 7m properties listed by Airbnb. Chesky has said that Airbnb’s 2020 revenue will probably be less than half of what the company booked last year.

In May, Airbnb cut 1,900 employees, or about 25% of its workforce. The company funded operations with $2bn in loans, including a $1bn investment from the private equity firms Silver Lake and Sixth Street Partners.

But demand has rebounded some as some travelers see home rentals as safer during the pandemic than crowded hotels. On 8 July, the company said guests had booked more than 1 million nights’ worth of future business. It was the first time that threshold had been reached since 3 March.

“Our business has not recovered, but we are seeing encouraging signs,” Airbnb said in a post on its website last month.

In a report issued last week, AirDNA – a company that tracks the short-term rental industry – said occupancy rates for short-term rentals had recovered more quickly than those for hotels. Airbnb has also said that rural destinations within driving distance of travelers’ homes have seen growing demand.

Renaissance Capital, which follows the IPO market, said in a recent note to investors that market conditions for Airbnb were about as strong as the company could hope for.

Airbnb’s IPO “will be a remarkable comeback after the pandemic decimated global travel, and proof that IPO investors think long-term”, the Renaissance CEO and co-founder, William Smith, wrote.

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