- Airbnb is set to hire Morgan Stanley and Goldman Sachs as advisers for its planned stock-market flotation in 2020, Reuters reported Wednesday.
- The home-share company represents a major client and is poised to be among the biggest firms to go public next year, with a private valuation of $31 billion.
- The banks are likely to serve more as market advisers than offer underwriters, as a direct listing doesn’t involve the sale of any new shares.
- The unconventional approach allows Airbnb to avoid the millions of dollars in bank fees commonly associated with IPOs.
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The home-sharing company represents a high-profile client. But if it opts for a direct listing, as has been reported, the mandate will likely be less rewarding for the banks. While traditional IPOs can bring banks millions of dollars in underwriting fees, Airbnb’s direct listing plan won’t involve the sale of any new shares.
Morgan Stanley and Goldman Sachs would likely serve as market advisers, and not as an IPO underwriter, Reuters reported.
Airbnb is considering a move to public markets in the middle of 2020, timing that would avoid volatility from the US presidential election, one source said. The firm is privately valued at around $31 billion, suggesting it could be one of the largest companies to go public next year.
The company’s move to public trading arrives after numerous tech IPO flops and delays throughout 2019. Unicorn companies — startups with $1 billion valuations — Uber, Lyft, and Peloton all plummeted after going public in 2019, wiping out hundreds of millions of dollars in investor wealth during their debuts.
WeWork pulled its IPO in late September after heightened scrutiny led to CEO Adam Neumann’s stepping down. The co-working company saw its valuation plummet roughly 75% as analysts critiqued the firm’s heavy spending and lofty ambitions.
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