The two will serve as joint advisers for the company’s stock-market flotation, which is scheduled for 2020.
Home-sharing and subletting company Airbnb is a serious, high-profile client for any bank. However, should the company pursue a direct listing, there is less to be gained from the bank’s point of view. Traditional IPOs typically net banks millions of dollars in underwriting fees, but Airbnb’s current direct listing plan doesn’t involve the sale of any new shares. Therefore, Morgan Stanley and Goldman Sachs will likely serve as little more than market advisers, not as IPO underwriters, according to Reuters.
The timing of Airbnb’s move towards going public is expected to be in early-mid 2020. The company is reportedly seeking to go public ahead of the market volatility expected from the 2020 US presidential elections, according to one source, who chose to remain anonymous. Privately, the company is valued at $31 billion, making it one of the largest companies expected to go public next year.
It would appear that Airbnb is following a trend in the tech sector. Several big tech companies, such as Slack and Spotify, have opted for direct listings over traditional IPOs. The news also follows a hectic year for IPOs. 2019 has seen many unprofitable companies flop at their attempts at going public. Companies like Uber and Lyft have seen shares plummet after launching their IPOs, while other companies’ IPOs have seen significant delays.