Soooo…Airbnb’s going public. Can I get a woo woooo?!
It looks likely to be an IPO (as opposed to a direct listing, an idea that had also been floated). Beyond that, we don’t know much.
When will it go public? How long will the lockup period be? At what price will it go public? How will the stock perform after it goes public? When will the double-trigger RSUs fully vest? When will we get to see the details in their confidential S-1 (the document a company needs to file with the SEC in order to publicly trade the company’s stock on the stock market, and that will have some limited amount of very useful information for regular folks)?
Who knows! It’s exciting. (And, by “exciting,” I mean stomach-ache-inducing. The traditional definition, I believe.)
As much anxiety as that uncertainty probably creates for you, it’s high time you made a strategy for your Airbnb stock, one that can adjust to whatever the reality ends up being. And then, I can assure you, you’ll feel Much Better knowing you’re prepared.
A company going public—even in the best of times, which, let’s review, these times are not—is a game of unknowns and guesses and waiting waiting waiting until finally you have the necessary information and are permitted to do something. And with Airbnb’s S-1 being confidential, our ability to know anything about the company and its plans is delayed even further. With the S-1 being confidential, we won’t get insight into the company’s details and the details of the IPO until roughly two weeks before the company actually goes public.
All of that said, you still need to start planning. Like, now. Yes, planning with almost no information about what the company is going to do.
You need to start planning now because things can happen very quickly
and boy won’t you be happy to have a strategy in your pocket to pull out when the action really starts.
If Airbnb’s IPO works as most IPOs do, you probably will have an extra six months (during the post-IPO lockup) after IPO Day to finalize your plan.
What Do You Know?
In practice, whatever the company ends up doing matters very little to how you plan. That’s all company-specific information.
Your plan should focus on you-specific information.
Thankfully, you already know all about yourself!
- What you have in Airbnb stock, options, RSUs
- Your goals and vision of an ideal life
- Your financial situation
You need to build a strategy that optimizes for “your goals and vision of an ideal life,” taking your current financial situation, including your Airbnb stock, into consideration. A strategy that you can implement no matter what happens with Airbnb’s plans to go public or what Airbnb’s stock does in the future.
Yes, this will take a goodly amount of thought. The (highly desirable) result of all that effort, however, will be a robust, flexible, rational plan, created while you were still in your right mind, before the craziness starts. This way, you’ll be more likely to act on rational thought, instead of emotion, when the time comes.
How Do You Plan for This?
- Get clear on your goals and vision of an ideal life
- Guess at what could happen with Airbnb’s IPO and its stock (what will happen, we simply can’t know in advance)
- Figure out how each of those possibilities would affect your personal situation
- Make a plan that will work the best, on average, over all those possible futures. A plan that eliminates or reduces risks that you simply cannot live with. A plan that allows for the possibility of “upside” if you can afford the associated risk.
What You Can Do Now, and What’s to Come
I plan to write several more blog posts that dig into the details of how to think about your RSUs, your stock options, selling Airbnb stock, and the interaction among those three.
I intentionally started off this series of blog posts with the rallying cry of, “Start planning for this now. Because once Airbnb clarifies its plans, and certainly once it goes public, you might be too excited/terrified/paralyzed to do the smart, rational thing.”
What to do with your RSUs, options, and stock are all tactics. What you need first is a strategy, and better why, a firm understanding of the why?.
What’s the first thing you should do? It’s the first part of any good financial plan: Get clearer on what you want in your life.
Is it buying a home? A trip to New Zealand (once we can travel again)? Buying your parents a home? Paying for your brother’s college? Leaving the tech industry? To feel safe?
Get this clarity by talking with people. It’s usually really helpful to say these words out loud, have someone repeat them back to you. Brainstorm. Shoot the sh*t. Bounce ideas. Explore. Don’t just stay within your own two ears, if you don’t have to. We have these conversations all the time with our clients, and simply Saying It Out Loud is powerful.
Whatever it is, get really clear on that. Because that is the thing that determines your strategy for your Airbnb stock and stock compensation, not an arbitrary dollar amount.
‘Til next time! When we start getting into the nitty gritty.
(P.S. I’m excited for you. Finally! Airbnb’s going public!)
Other posts in this “Airbnb is going public” series:
#2 Airbnb Is Going Public. What a Good Time to Give Away Your Money.
#3 Airbnb Is Going Public. What Should I Do with my RSUs?
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Disclaimer: This article is provided for general information and illustration purposes only. Nothing contained in the material constitutes tax advice, a recommendation for purchase or sale of any security, or investment advisory services. I encourage you to consult a financial planner, accountant, and/or legal counsel for advice specific to your situation. Reproduction of this material is prohibited without written permission from Meg Bartelt, and all rights are reserved. Read the full Disclaimer.