“Good news, everything that happened in 2000 turned out really well for everyone involved.”
Hey there carnivores,
Markets were down on Tuesday as a late sell off of tech stocks killed what started as a good rally…
Today we’re talking Airbnb’s foray into public trading.
Jeff & Jason
See you out there
Airbnb has gotten crushed by COVID, but that won’t deter it from trying to go public.
On Tuesday, reports surfaced that the company that made couch surfing socially acceptable was preparing to file confidentially for an IPO. If all goes according to plan, we could see a listing by the end of the year. Hitching your wagon to anything in 2020 just feels like a terrible idea.
Leading the charge for Airbnb will be Morgan Stanley, with Goldman Sachs and DJ D-Sol coming off the bench to support the cause. If they don’t throw a Project X party at an Airbnb to celebrate, is there even a point in going through with this?
Like most of the hospitality industry, Airbnb got ravaged by COVID and the lack of travel globally. Most recently, it had been valued at around $18B, down from the $31B when it last raised money in 2017.
CEO Brian Chesky also told employees that the company expected 2020 revenue to be just half of what it was in 2019… before he promptly laid off 25% of them. Which is ironic considering they’ll have to use Airbnb to rent out rooms in their home to pay the mortgage.
Airbnb won’t be alone in IPOing this year if all goes according to plan. Warner Music Group and insurance startup Lemonade hit the market in the first half of 2020, while DoorDash and Palantir are also slated to start trading this summer or fall. Just in time for college footb–…nevermind.
The bottom line…
You sure this is a good idea?
Believe it or not, 2020 has been quite kind to companies taking their talents to US stock exchanges. So friendly, newly issued stock performance rivals that of the Dot Com Bubble.
US-listed IPOs have taken home more than $60B in 2020, despite the world as we know it collapsing around us.
On average, each IPO has jumped 23% on its opening day. Again, the largest average first day of trading since 2000. Remember when Mark Cuban was just a tech nerd? Those were the days.
☑️ Do…call it a comeback. A few really, really, really bad investments can’t keep SoftBank down.
The Japanese investment group bounced back from its worst year ever, announcing a $12B profit for its fiscal Q1. Most of the profit came from Masayoshi Son’s company unloading its stake in Sprint.
SoftBank has had to lick its wounds and start selling off its valuable assets (Sprint and Alibaba) after some failed investments led to its worst year ever. The company sold roughly $41B as of August 3rd that it has used to buy back shares and pay down debt.
Profits were also helped by the $100B Vision Fund getting its act together. It saw an investment gain of roughly $2.8B thanks to a rally in tech. Have they considered just going long $TSLA?
☑️ Split-city. Elon Musk, a man of the people.
Tesla announced it is issuing a five-to-one stock split, meaning owners of the company stock will get five shares for every one they own. The move takes effect after trading on August 31, so start saving your pennies.
When a stock split takes place, the price per share falls (…because, math), allowing potential retail investors (read: day traders) to get in on the action. Prepare for free-for-all on September 1st.
☑️ Change of scenery. GM’s CFO Dhivya Suryadevara is leaving the auto giant for an unlikely landing spot: payment giant Stripe. I guess majoring in finance was a good choice.
Stripe has been making big moves in its executive ranks poaching Mike Clayville from Amazon Web Services and Trish Walsh from Voya Financial to become Chief Revenue Officer and General Counsel, respectively.
Suryadavera will be tasked with balancing Stripe’s aggressive growth while maintaining “the highest standards in discipline and fiscal responsibility.” Just like Luckin’s CFO.
Despite only being in her role at GM since December 2018, Stripe’s new CFO helped navigate a tumultuous time for the automaker that saw a worker strike and this nasty pandemic. At the very least, she will be happy not to have to deal with UAW anymore.
☑️ Delay of game. The Big 10 and Pac-12 have announced that they are postponing (read: canceling) the conferences’ respective college football seasons for Fall 2020, citing concerns over coronavirus.
While the news itself is sad for the teams who have worked hard to compete for championships and a potential career in the NFL, the Universities and TV Networks that stand to make billions off of the “unprofessionals” are taking a big L, financially.
The Big 10 signed a six-year TV deal with ESPN and FOX worth $2.64B in 2017 and each of the conference’s 14 teams (wait, what?) received roughly $54M in 2018 and 2019. At least the schools don’t have to worry about paying the athletes as…athletes this year.