Airbnb is planning for direct listing instead of traditional IPO

Bloomberg

Airbnb Inc’s long-awaited Wall Street debut is officially earmarked for 2020, but the home-share startup is charting an unconventional path to the public markets.
San Francisco-based Airbnb is laying the groundwork for a direct listing rather than an initial public offering, according to people familiar with the matter who asked not to be named discussing private information. Airbnb declined to comment.
Technology startups usually choose a traditional IPO to tap into the public markets. Some of the new generation of tech firms have spent years raising private funds and don’t necessarily need money from an IPO to expand their business, but are looking for a way to let employees and investors cash out. A direct listing allows companies to lower the millions of dollars they typically pay to investment banks in underwriting fees, because they don’t issue any new shares and don’t raise any new capital.
An IPO would also force Airbnb to open its books to investors. The We Co, which was supposed to have an IPO this fall, had to withdraw its plans after some investors took a look and were highly critical.
So far this year, Airbnb’s fellow tech unicorns that have gone public have received a chilly reception. Uber Technologies is trading at 30 percent below its IPO price, Lyft is down more than 40 percent and Slack is down almost 8 percent.
Unlike these unprofitable companies, Airbnb has a stronger financial position. In the last quarter, it pulled in more than $1 billion in revenue and the company has said its earnings before interest, taxes, depreciation and amortisation were positive in both 2017 and 2018.