Airbnb's decision to de-list Jewish owned properties in the West Bank is anti-Semitic and will have a dramatic, negative effect on the company's mid-2019 Initial Public Offering (IPO).
XIn a lengthy statement announcing its new policy, Airbnb attempted to claim a thoughtful and nuanced moral high ground. They justified their decision by noting the disputed nature of the West Bank. They're not singling out Jews, they imply, they're merely adopting a policy on disputed territories.
But that's not true. Not only does Airbnb have listings in other disputed territories, including Kashmir, northern Cypress, Tibet and Nagorno-Karabakh, the company hasn't de-listed all properties in the West Bank — just those owned by Jews.
Airbnb's policy is neither thoughtful nor nuanced; rather it is repugnant and bigoted. The company's justifications are hollow. And, in many states, it places the company in the crosshairs of elected officials that have had enough of thinly-veiled anti-Semitism.
For example, incoming Florida Governor Ron DeSantis noted that once he takes office, the Sunshine State will "review how Florida interacts with Airbnb."
States Take Action
At the request of Illinois Governor Bruce Rauner, his state has now taken official action against Airbnb, as the state's Investment Policy Board Committee on Israel Boycott Restrictions, whose members include appointees by the governor and representatives of the state pension board, voted unanimously that Airbnb is in violation of state laws.
Likewise, Christians United for Israel — the nation's largest pro-Israel organization — has been in contact with senior officials in our home state of Texas and elsewhere. And the feedback we've received is unanimous: Airbnb's new policy runs afoul of laws prohibiting certain states from investing public funds in companies that boycott Israel or territories under its control.
That's bad news for the banks and private equity firms preparing for Airbnb's IPO who can expect valuations to drop in response to a steady flow of state-based actions against the company. And it's bad news for future shareholders who will not be joined in their investment by large public pension funds that are prohibited in many states from making investments in companies that boycott Israel. Texas alone has a $150 billion teacher's pension fund.
Problems With Investors
The universe of funds potentially invested in the company will shrink by hundreds of billions of dollars. Notwithstanding the lawsuits against Airbnb's policy that continue to pop up, there are also many principled investors who simply won't trade in a stock tainted with anti-Semitism. The enormous uncertainty associated with Airbnb's IPO will scare away even retail investors for whom investing is a completely amoral business.
Airbnb will only appeal to those who can stomach betting on a company with a massive built-in investment handicap, public relations baggage and potential legal exposure. I suspect there aren't many investors who seek out risk, uncertainty and bad press, and if Airbnb maintains its present course, we'll know for sure.
Airbnb's decision is not just morally bankrupt, it's a massive financial miscalculation. The company did get one thing right in their statement announcing their new anti-Semitic policy, "We are most certainly not the experts when it comes to the historical disputes in this region." Truer words were never spoken.
- Parker, a practicing attorney, is the Chairwoman of the CUFI Action Fund, the political arm of the 5 million member organization, Christians United for Israel.
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