Name: How Airbnb Salvaged Its IPO | WSJ
Uploaded: 2021-05-31T02:00:33.000Z
Duration: 5 min 18 s
Description: Thousands of YouTube videos with English-Chinese subtitles! Now you can learn to understand native speakers, expand your vocabulary, and improve your pronunciation...

with an estimated market valuation of over $42 billion.

Adverbs of degree

A remarkable feet when considering just eight months ago,

the home-sharing giant was in crisis mode

with its business being crushed by the Coronavirus pandemic.

From April to June, 2020, revenue was down 72%

Here's how Airbnb managed to pivot towards profitability

during a global pandemic and how it might fair

amongst continued travel restrictions and beyond.

travel restrictions around the world sent Airbnb's bookings

So its first lifeline was securing $2 billion in loans,

- So when the pandemic hit, Airbnb was bleeding

through its cash reserves and it needed a swift infusion

which is often associated with distressed assets.

- [Narrator] At this point, Airbnb's valuation

Despite this, Airbnb was still under pressure

- So Airbnb CEO had toyed with the idea of going public

for years, but he'd stopped short of pulling the trigger.

Now that was leading to some anxieties setting in

among early investors and a handful of employees

who were set to lose their stock options next year.

- [Narrator] Like many other companies during the pandemic,

Airbnb dramatically reduced its cost to get by,

costs that have grown significantly over the last few years.

into new areas like transportation and media

more than five fold between 2015 and 2019.

Airbnb spent big to expand into all sorts of new areas.

It also spent big on a new corporate headquarters

and it typically spends heavily on things

- [Narrator] To alleviate its balance sheets,

Airbnb cut big expenses, put many non-corporate projects

on hold and laid off a quarter of its staff.

They slashed sales and marketing expenses,

and he said he went through his accounts line by line

- [Narrator] But none of Airbnb's maneuvers

would work if people didn't start booking

So the third move it made was to adapt its platform

They still wanted to travel but they couldn't get

So what people start doing is that they start driving

They book Airbnbs because big hotel chains

big cities visited by tourists had been Airbnb's strength,

but these new local stays in primarily suburban

and rural locations became the company's focus.

- [Narrator] The company redesigned its website and its app.

So its algorithm would show prospective travelers,

everything from cabins to lavish beach houses

By August more than half of bookings were made

for stays within 300 miles of guests location,

And these moves help stem the losses in reservations.

The company reported a surprise profit in the third quarter.

This quarter is typically the most lucrative

for the company and Airbnb has turned a profit

but it's turned around during the global pandemic,

and at a time when the hotel industry is drowning,

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How Airbnb Salvaged Its IPO | WSJ

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struggle

pandemic

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