Airbnb losses pile up amid pending IPO

Online rental marketplace Airbnb is aiming to take its shares public next year, but new data casts doubt over where investors may be eager to buy in amid a slew of disappointing initial public offerings this year.

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According to numbers reported this week by The Information, the company’s operating loss in the first quarter was $306 million, which is more than double what it was the same period a year prior.

It also bumped up spending significantly on sales and marketing to $367 million, a 58 percent year over year increase, as it prepares to take its shares public.

Expenses for the quarter grew by 47 percent, which could be problematic if the company cannot grow enough to offset them. The Information noted that an uptick in ad spending could indicate the company is having a hard time holding onto customers.

Gross margins grew at about 66.6 percent, slightly lower when compared with the 68.75 percent a year prior.

As a private company, it is not required to release detailed financial results.

A spokesperson for Airbnb did not immediately return FOX Business' request for comment.

As noted by The Information, Airbnb is expected to have turned an $18.7 million operating profit in 2018, before interest and taxes.

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Wall Street is cautious after two high-profile IPOs — Uber and Lyft — failed to take off this year. Both stocks flopped since their highly-anticipated debuts due to concerns over pathways to sustained profitability. Both companies have bled cash. Uber posted a $5.2 billion loss in the second quarter its largest since 2017, and Lyft lost more than $644 million.

Uber’s stock is trading around $32, while Lyft shares are closer to $40.

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UBERUBER TECHNOLOGIES INC.
$27.02
+0.27 (+1.01%)
LYFTLYFT INC.
$44.29
-0.57 (-1.27%)

Meanwhile, office-sharing startup WeWork had to scrap plans to take its shares public, after it was revealed that it too was bleeding red ink and investor interest waned.

It is unclear when Airbnb plans to launch its IPO in 2020, but the company said it is working on a multimillion-dollar marketing campaign, which will include ads across both TV and digital platforms.

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