Airbnb IPO could be the ‘steal of the century,’ Jim Cramer says

The coronavirus pandemic has carved out a lane for lodging firm Airbnb and it makes the forthcoming IPO much more engaging, CNBC’s Jim Cramer mentioned Monday.

“I think it’ll be a steal,” the “Mad Money” host mentioned.

The ongoing international well being disaster devastated the journey and resort industries, as nations put flight restrictions and lockdown orders in place to cease the unfold of the lethal virus.

Airbnb, which connects vacationers with property leases, was not spared as situations pressured the firm into cost-cutting mode the place it laid off about 25% of its workforce and lowered advertising and marketing spending. Wall Street speculated whether or not Airbnb would shelve its plans to go public this 12 months.

With lodges hobbled, Cramer mentioned the trade will discover it a lot tougher to proceed boxing Airbnb out the market.

“Thanks to Covid, AirBnB is now the safest way to travel, which is why this IPO might end up being the steal of the century. It pretty much has the market to itself,” he mentioned. “The once-mighty hotel and restaurant industries — and their unions — no longer have the clout to keep Airbnb down.”

Airbnb leases in rural areas, nevertheless, recovered as folks sought trip and refuge from virus-stricken communities. The firm, although, had an $18 billion valuation as of April, nearly half what it was price in 2017.

While executives as soon as toyed with a possible direct itemizing, Airbnb revealed final week that it filed paperwork for an preliminary public providing. It stays unclear what number of shares it plans to supply.

“This turns out to be another one of those forever changed businesses that’s actually benefitting from Covid-19,” Cramer mentioned. “Before the virus, staying in someone else’s house seemed maybe a little more risky than staying at a hotel. Now, the hotels seem outright dangerous, and even the most pampered rich people have figured out how to clean up after themselves.”

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