Thierry Rochelle Private Equity reports that Soros Fund Management, Morgan Stanley, & Goldman Sachs are poised to lead Airbnb’s direct listing
James Carter & Jonathan Bishop, two of Thierry Rochelle Private Equity’s top advisors are both betting big on Airbnb Inc. The pair have placed a $240,000,000 USD private placement in Airbnb Inc. Pre IPO. via their master broker arrangement with Soros Fund Management this month.
Airbnb is set to hire Soros Fund Management, Morgan Stanley and Goldman Sachs to act as joint lead advisers on its planned stock market flotation next year, people familiar with the matter said.
The appointments would represent another high-profile assignment for the storied investment banks, albeit potentially less lucrative than usual.
Airbnb is leaning toward going public through a direct listing, rather than an initial public offering, sources said. Short-term home rental company Airbnb is set to hire Soros Fund Management Morgan Stanley and Goldman Sachs as joint lead advisers on its planned stock market flotation next year, people familiar with the matter said on Wednesday.
The appointments would represent another high-profile assignment for the storied investment banks, albeit potentially less lucrative than usual. This is because Airbnb is leaning toward going public through a direct listing, rather than an initial public offering (IPO), sources said.
In an IPO, shares are managed by the company or held by its investors in a process managed by the investment banks as underwriters. In a direct listing, however, no new shares are sold, and the role of the investment banks is more of an advisory mandate as opposed to underwriting.
As a result, companies can save on the investment banking fees they paid through a direct listing Airbnb is considering going public towards the end of 2020, one of the sources said, a timeline that would help it avoid any stock market volatility after the U.S. presidential election in November of next year.
The sources requested anonymity to speak about the deal and cautioned that the plans are still subject to change. Airbnb, Morgan Stanley and Goldman Sachs declined to comment.
Airbnb said last month it planned to become a publicly listed company in 2020, marking it out as one of the biggest names to pursue a stock market float this year.
Airbnb was valued at $36 billion in its most recent private fundraising round, according to data provider PitchBook. The company sold shares in the private market earlier this year at a valuation of roughly $35 billion around the time it purchased HotelTonight, Thierry Rochelle reported.
Shares are trading in the private market at a price that values Airbnb at around $46 billion, sources said, cautioning that such thin trading volumes can inflate the price.
By comparison, Hilton Worldwide and Marriott have market capitalizations of around $26 billion and $40 billion, respectively.
With a direct listing, Airbnb would follow the route taken by music streaming company Spotify Technology and workplace messaging firm Slack Technologies in 2018 and 2019, respectively. Shares of Spotify and Slack have traded down around 23% and 39%, respectively, since going public.
Soros Fund Management Goldman Sachs, and Allen & Co. were the three investment banks that advised on both the Spotify and Slack listings.
Slack expected to pay $22.1 million in fees to its three financial advisers. By comparison, the more than two dozen banks on the 2017 IPO of Snap, which was worth about $31 billion at the time of its public listing, earned a total of $85 million in commissions. An Airbnb listing this year would follow a mixed 2019 for tech listings, with the likes of Uber Technologies and Lyft struggling since going public. Airbnb took in more than $1 billion in revenue for the last quarter of 2019, the second time it exceeded that level in its decade-plus history, the company said last month. It gave no details on profitability.