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Quebec risks big in this king of Airbnb

Quebec is taking a big risk in this king of Airbnb

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The value of the shares purchased by Investissement Québec has fallen by 80%.

Québec could lose big after making an investment of US$20 million, the value of which collapsed, in the king of Airbnb.

Last week, our Bureau of Investigation reported a $30 million loan from the Quebec government, in the midst of a housing crisis, to the multinational Sonder specializing in short-term Airbnb-type rentals.

< p>However, this is not the only amount of public money that has been granted to this king of Airbnb, which manages the rental of nearly 400 apartments in Montreal. 

In April 2020, Investissement Québec (IQ) made an investment of US$20 million in shares of Sonder. 

Prime Minister François Legault visited Sonder's offices in California and met with its executives, including boss Francis Davidson, in December 2019. On his Twitter account, he wrote: “I visited tonight with the employees of @SonderStays, a young dynamic company specializing in the field of accommodation. Founded by Montrealers, Sonder has 400 employees in San Francisco and is present in 25 major cities. Photo credit: taken from Prime Minister Legault's Twitter account

According to its most recent annual report, released Thursday, IQ still owns 1.3% of the company, which today equates to approximately US$4 million.

At the time of the investment 'IQ, Sonder was valued at more than $1 billion, according to Forbes magazine. 

But since its IPO in January 2022, its value has plummeted . The stock fell from a high of US$10.41 in early February to US$1.43 yesterday. Sonder is therefore worth US$314 million today, according to the site. from the NASDAQ Stock Exchange. 

Last week, IQ Chairman and CEO Guy Leblanc defended his investments in the controversial company.

“Sonder is not exactly the same profile as Airbnb. They own their buildings and the accommodations they rent out are more of the higher standard accommodations. It is not an affordable housing clientele,” said Mr. Leblanc, on the sidelines of the unveiling of the annual report.

Misinformed

But Mr. Leblanc is misinformed, since the company does not own any building it operates in Montreal. 

Furthermore, just before IQ invested in Sonder, that -ci had trouble with the City of Montreal in connection with the short-term rental of apartments on Le Plateau-Mont-Royal.

A letter from the office of the Comptroller General of the City of Montreal that we obtained indicates that municipal inspectors had asked a landlord to stop Sonder's activities in his apartment building, in December 2019, or face fines.  

At the time , and at least until March 2020, Sonder rented out a good part of the 16 apartments in this building, rue Hôtel-de-Ville, on tourist accommodation platforms. 

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