Haile Hernandez
Title: Airbnb Gets $1 Billion Loan, Bringing Coronavirus Funding to $2 Billion
April 15, 2020 1:50 am ET
The Corona Virus is affecting everyone personally, financially and especially in the business world. A big industry that has taken a hard hit is the travel industry. Businesses that depend on tourists are struggling to make revenue. This article discusses how Airbnb is being affected. The article stated that because of the virus the company “faced escalating losses as travel ground to a halt”. To help with these losses, institutional investors gave Airbnb Inc. a $1 billion loan. With this money Airbnb will be able to quickly get back on their feet after the pandemic is over. Without this help the company could quickly go under and the industry would lose a credible company in the home-sharing marketplace. The article also discussed how in return the investors will "get warrants that can be converted into shares with a valuation for the company of $18 billion". In chapter 13 we learned that businesses have promotions for goods to help increase sales and revenue and Airbnb Inc. are doing something similar by offering such large shares for cheaper. Airbnb Inc. knows without revenue because of Corona, and without help, they could go bankrupt. An easy task for them is to lower the price of share so they can stay a float. This is similar to other businesses having promotions so they can increase sales. With Airbnb Inc. it is less of increasing income and more of just having an income.
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