The Coronavirus is impacting Airbnb. According to CNBC, the room rental platform is looking for offers from large investment firms.
As Airbnb was getting ready to go public in 2020 through an IPO or direct listing, the coronavirus crisis has the company putting that decision on hold. During this coronavirus outbreak and volatile market, it is very difficult for any company to go public.
In 2017, Airbnb sold stock to venture capitalists at $31 billion valuations. The company later sold stock at a $35 billion valuation, through their purchase of HotelTonight, and in 2019, the company had an internal valuation of $38 billion.
Why would Airbnb look for outside investment at this time? Axios reports this is “protection money”. The company reportedly does have a lot of liquidity and has not laid off any employees. But, as quarterly losses continue to climb and travel expected to decrease by 50% in the future, the company’s growth could stop.
For risky investors, this is an opportunity to invest in a company, which would continue to grow, once the pandemic comes to an end.
In related news, on Thursday, Treasury Secretary Steven Mnuchin revealed details of the Trump administration‘s financial plan to send money as part of a stimulus package to soften the blow of the Coronavirus outbreak.
Mnuchin said in a Fox Business Network interview discussing the fiscal stimulus plan. Congressional leaders are talking about the plans, which would send payments to Americans. The total cost of the stimulus plan would total $500 billion, and the government will divide the money into two large amounts.
“The first one would be $1,000 per person, $500 per child,” Mnuchin said. “So for a family of four, that’s a $3,000 payment.”
“As soon as Congress passes this, we get this out in three weeks. And then, six weeks later, if the president still has a national emergency, we’ll deliver another $3,000,” Mnuchin said.