Wednesday November 18

Wednesday November 18

over 3 years ago3 mins

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Airbnb's Listing Details

Airbnb published the prospectus for its long-awaited stock market listing late on Monday, and it’s fair to say it takes the “humble” out of “humble abode” 🏡

What does this mean?

The paperwork Airbnb filed when it announced it’d be “going public” back in August was confidential, so this prospectus finally gave investors a look at what’s going on under the hood. And one of the most surprising revelations was that the company actually made a profit last quarter, even as the pandemic brought travel to a standstill 🛑 The company put that down to heavy cost-cutting – particularly in marketing – as well as a pivot toward “staycations”.

Airbnb quarterly gross booking value

That resilience has proved itself in other ways too: Airbnb went from a $31 billion valuation in 2017 to just $18 billion in April this year, but it’s aiming to be back up to roughly $30 billion when it lists on the stock market in mid-December.

Why should I care?

Airbnb’s initial public offering (IPO) is one of the most anticipated stock market debuts in the last few years, and it’d be the cherry on the cake that is this blockbuster year for IPOs 🍰 But given how busy December’s going to be for new listings, it might still have to vie for investors’ attention. Just last week Doordash filed its IPO paperwork: the food delivery app is hoping for a valuation of $25 billion – a long way from the $1.4 billion it was worth in 2018.

Zooming in: Control issues.

Both Airbnb and Doordash are issuing several types of shares that will give their holders’ different levels of voting rights. Their founders will get shares worth 20 votes each, for instance, while retail investors will have to make do with one vote per share 🤔 Voting structures like these help make sure the head honchos stay that ways – and while investors do generally prefer a more equal approach, it’s not exactly put them off Google-parent Alphabet...

Airbnb gif

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Walmart's Better-Than-Expected Results

Walmart image

No matter what the pandemic’s had in store, Walmart’s stores have had something better: the retail chain reported better-than-expected quarterly earnings on Tuesday 🛒

What does this mean?

The pandemic’s had a massive impact on the way Walmart’s customers shop: it’s not just that they’re more likely to stock up in bulk when they visit its stores, it’s that they’re now more likely to avoid them altogether in favor of the – checks notes – world wide web. And that showed in Walmart’s update: the company’s US ecommerce sales grew by 79% in the third quarter versus a year ago 🇺🇸 And even though sales growth in US stores that’ve been open for at least a year didn’t break records like they did in the first and second quarters, they still jumped by a lot more than analysts were expecting – and without help from government stimulus checks this time around.

Walmart's quarterly comparable U.S. sales, change from a year ago
Source: The Wall Street Journal

Why should I care?

In September, Walmart launched Walmart+ – a membership service that gives customers free shipping on items including produce and grocery, and an unapologetic attempt to compete with Amazon Prime. But seeing as the company didn’t say much about the scheme in its update, investors will have to wait to find out how it’s been going 💊 Meanwhile, Amazon is returning the favor: it launched prescription drug delivery service Amazon Pharmacy on Tuesday – a long time coming, considering the ecommerce giant bought American online pharmacy PillPack back in 2018.

Good earnings aside, the rest of the year isn’t without its challenges for Walmart. Fresh data out on Tuesday showed US retail sales growing by just 0.3% in October compared to the month before, and that could slow even more as coronavirus cases rise and government benefits lapse 🦠 Just in time for the all-important holiday season too…

Walmart gif
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