Tuesday 1 October 2019 5:29 pm

Airbnb ‘plots direct listing’ instead of traditional IPO for hotly-anticipated float

Airbnb is said to be shunning a traditional initial public offering (IPO) in favour of a less conventional direct listing when it floats on the public market next year.

The San Francisco-based tech giant is currently making preparations for a listing that would not involve creating any new shares, Bloomberg reported, citing people familiar with the matter.

Read more: Authorities continue to question Airbnb as its tax bill shifts into decline

A direct listing would allow Airbnb to avoid paying millions of dollars in underwriting fees to banks, and would prevent its shares from being diluted.

The method would also sidestep the need for the firm to open its books to potential investors, a move that weighed heavily on Wework’s now-shelved IPO.

Direct listings have become increasingly popular among valuable tech startups, with Spotify and Slack both opting for the alternative route to the public market.

Airbnb may also have been put off by the disappointing recent IPOs of Uber and Lyft, which have both seen their share prices tumble following a poor reception from investors.

Fears of a tech bubble have been heightened by the fiasco surrounding Wework’s halted float that has led to founder Adam Neumann stepping down as chief executive.

Airbnb has a valuation of $31bn (£25bn) and its float is likely to be one of the largest of 2020.

The firm has come under pressure to fast track its plans to list, as several tranches of shares awarded to long-standing employees are set to expire in November 2020.

Read more: Airbnb plans to go public in 2020

Filings seen by City A.M. earlier this week revealed Airbnb continues to face scrutiny from HM Revenue & Customs over its UK tax structure.

The holiday rental site pulled in profit of almost £2m in the UK last year, up 17 per cent from its £1.7m income in 2017.

Airbnb has been contacted for comment.

Main image credit: Getty