The value of shares bought by Investissement Québec fell by 80%.
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Quebec could face big losses after making a $20 million investment in Airbnb’s king that has collapsed in value.
Last week, amid a housing crisis, our Bureau of Investigation reported a $30 million loan from the Quebec government to multinational Sonder, which specializes in Airbnb-style short-term rentals.
But that’s not the only sum of public money that has been awarded to this king of Airbnb, who manages the rental of nearly 400 Montreal apartments.
In April 2020, Investissement Québec (IQ) invested $20 million in shares of Sonder.
Photo from Twitter
Prime Minister François Legault visited Sonder’s California offices in December 2019 and met with its executives, including chief Francis Davidson. On his Twitter account, he wrote: “Tonight I visited the staff of @SonderStays, a young dynamic company specializing in accommodation. Founded by Montrealers, Sonder has 400 employees in San Francisco and a presence in 25 major cities. Photo credit: taken from Prime Minister Legault’s Twitter account
According to its latest annual report, released Thursday, IQ still owns 1.3% of the company, which translates to about $4 million today.
At the time of IQ’s placement, Sonder was valued at more than $1 billion, according to the magazine forbes.
But since it was listed on the stock exchange in January 2022, its value has fallen sharply. The stock fell from a high of $10.41 in early February to $1.43 yesterday.
According to the NASDAQ Stock Exchange website, Sonder is now worth $314 million.
Last week, IQ Chairman and CEO Guy Leblanc defended his investments in the controversial company.
“Survey doesn’t have exactly the same profile as Airbnb. They own their buildings and the apartments they rent out tend to be of a higher standard. It’s not an affordable housing clientele,” explained Mr. Leblanc on the sidelines of the annual report’s unveiling.
But Mr. Leblanc is misinformed as the company does not own a building that it operates in Montreal.
Also, shortly before investing in Sonder, IQ had issues with the City of Montreal related to the short-term rental of apartments at Le Plateau-Mont-Royal.
A letter we received from the City of Montreal’s Office of the Comptroller General shows that in December 2019, city inspectors ordered a landlord to cease Sonders’ activities at his home or face fines.
At that time and at least until March 2020, Sonder rented a good part of the 16 apartments in this building on rue Hôtel-de-Ville through tourist accommodation platforms.