Airbnb IPO Might Be the "Steal of the Century"
Despite Airbnb surprising many investors with its filing to go public last week, Jim Cramer likes it, according to Markets Insider.
The pandemic has decimated global travel and demand for rental homes. However, Jim Cramer likes the company's IPO. "Thanks to COVID-19, Airbnb is now the safest way to travel, which is why this IPO might end up being the steal of the century," he said. People have started to view hotels as dangerous due to shared areas such as elevators, pools, gyms, and other facilities. This is good for Airbnb.
Furthermore, hotels are busy trying to secure government funding to avoid bankruptcy. "It pretty much has the market to itself," he said. "The once-mighty hotel and restaurant industries - and their unions - no longer have the clout to keep Airbnb down." Homeowners may also look to rent our spare rooms and homes for extra cash. "This turns out to be another one of those forever-changed businesses that's actually benefiting from COVID-19," he said.
In May, CEO Brian Chesky stated that revenues were projected to fall 50 percent this year. This lead Airbnb to cut costs, raise $2 billion in new capital, and lay off 25 percent of Airbnb's workforce. Airbnb bookings have rallied since then but were still down 30 percent in June compared to a year prior.