Analysis of the 10K Financials of Airbnb

Topic: Financial Management
Words: 549 Pages: 2

The primary sources of short-term financing are bank loans and trade credit. In 2020, the company secured a loan of $ 1 million from a group of lenders led by Morgan Stanley Senior Funding Inc. The secured loans from First Lien Credit required a pledge that the loan is payable by April 2025. The loan was to be repaid in part or as a whole to April 2025. By September of 2020, the firm was required to pay its first quarterly installments of the First Lien Loan.

In April 2020, the company entered into another $1 billion loans, the Second Lien Credit Agreement (The second Lien Loan). The loan is payable with a commitment fee of 0.15% and payable quarterly (Sec.Gov). The firm is to pay the credit by July 2025. The firm entered into a credit agreement with conditions revolving around covenants and defaulting. The company was required to have $200 million in the liquidity covenant if the company ran bankrupt.

The company has a short-term credit loan that is unsecured, which means that the firm does not have to pledge its assets as security. However, the Company issued warrants to sell its Class A common stock to use it as a trade credit in connection to the second Lien loan. As of December, the fair value of the shares had a total of $985.2 million since its issuance in April 2020.

The firm is to repay lenders in premiums under the agreement from the sale of collateral (shares). The outstanding loan as of 31st December was $1995 million (Sec.Gov). Also, there were no borrowings, and the total amount summed to $21.4 million, and the company complied with the covenant of the first and second Lien Credit Agreement.

The Airbnb hosts are located in more than 10,000 cities, and this gives guests a vast variety of unique homes and spaces to choose from (Sec.Gov). Airbnb homepage showcases a wide variety of homes to be explored by guests. Its platform offers value and inclusive costs to match its guests’ options. Their platform is easy to use and has relevant personalized search results. It has also incorporated data management and cloud support systems to realize efficiency and increase its productivity.

It uses application program interfaces to list properties on the Airbnb platform. Additionally, it has seamlessly designed its platform to provide wish lists for guests to leave their reviews and contribute to the Airbnb community. The firm’s platform is trusted, safe, and offers community support (Sec.Gov). With the COVID-19 pandemics, the company has provided listings close to where guests reside.

The firm consists of individual and professional hosts who can share homes, interests, and talents with Airbnb guests. The professional hosts include serviced apartment providers, property companies, and boutique hotels that expand the listing to Airbnb guests. Professional hosts are in charge of property management and the hospitality business. The hosts are then in charge of expanding the listings to guests. They have the role of marketing, managing, and controlling the activities on the Airbnb platform. The company’s business depends on a listing made by hosts on their platform (Sec.Gov). The host engages in encouraging guests to book the listings and provides timely responses to guests’ inquiries. They are also tasked with offering exceptional services, hospitality, and experience to guests.

Work Cited

Sec.Gov.” Form 10-K Airbnb, Inc., 2021. Web.