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Airbnb raises $1B at $31B valuation, became profitable in 2016

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Re: Airbnb raises $1B at $31B valuation, became profitable in 2016

#31

Post by beefman »

We haven't had a recession in 8 years, and the postwar average time between recessions is 6 years.[1] The stock market's overall PE ratio is well above average.[2] With Box and Snap, the market demonstrated it is starving for tech IPOs -- even if a company is losing money and entirely based on a millennial fad.

So why in the name of sweet baby Jesus would investors, founders, or anyone else delay an IPO at this point? Can anyone explain it?

[1] http://www.nber.org/cycles.html [2] http://www.multpl.com

Re: Airbnb raises $1B at $31B valuation, became profitable in 2016

#32

Post by geodel »

kilroy123 wrote: post #15

I'm not surprised to see Airbnb became profitable. They've expanded everywhere. I nomad around and always use Airbnb, I've booked places on several continents. However, I'm definitely feeling the effects of their growing pains. For example, many people have bought places to only rent on Airbnb full-time. Most of these people suck at being an hotelier. It's clear people get lazy and are just trying to make money. Thin…

> I'm not surprised to see Airbnb became profitable. They've expanded everywhere.

Uber also expanded everywhere and it only increased its loses. It could be that their business model is not based on subsidies borne by investors as in case of Uber.

Re: Airbnb raises $1B at $31B valuation, became profitable in 2016

#33

Post by Tloewald »

dragonwriter wrote: post #23
kilroy123 wrote: post #15

I'm not surprised to see Airbnb became profitable. They've expanded everywhere. I nomad around and always use Airbnb, I've booked places on several continents. However, I'm definitely feeling the effects of their growing pains. For example, many people have bought places to only rent on Airbnb full-time. Most of these people suck at being an hotelier. It's clear people get lazy and are just trying to make money. Thin…

> Unless, they fix this and get more people to review honestly. I think they're going to run into a lot of problems. I don't airBnB, but a friend who does was recently berated by a host after leaving a 4-star review; that host claimed (don't know how true this is) that many hosts will refuse to rent to you again if you leave anything but a 5-star review. That and other things I've seen and heard about airBnB reviews…

The whole system of review curation that infests online markets is a problem waiting to be solved. Right now we basically have to parse reviews on the 4.4-5.0 scale because anything outside that is meaningless.

It's amazing to go read a novel rated 3 stars (because it operates outside this loop) and find it transcendently good.

Re: Airbnb raises $1B at $31B valuation, became profitable in 2016

#34

Post by Tloewald »

beefman wrote: post #31

We haven't had a recession in 8 years, and the postwar average time between recessions is 6 years.[1] The stock market's overall PE ratio is well above average.[2] With Box and Snap, the market demonstrated it is starving for tech IPOs -- even if a company is losing money and entirely based on a millennial fad. So why in the name of sweet baby Jesus would investors, founders, or anyone else delay an IPO at this point…

Maybe the smart money is on a market shock in the next several months and IPOs are leery of something terrible happening during the window between announcement and implementation. We do, after all, have a very strange political situation.

Re: Airbnb raises $1B at $31B valuation, became profitable in 2016

#35

Post by harryh »

beefman wrote: post #31

We haven't had a recession in 8 years, and the postwar average time between recessions is 6 years.[1] The stock market's overall PE ratio is well above average.[2] With Box and Snap, the market demonstrated it is starving for tech IPOs -- even if a company is losing money and entirely based on a millennial fad. So why in the name of sweet baby Jesus would investors, founders, or anyone else delay an IPO at this point…

Not an answer to your question but semi-relatedly Scott Sumner had a post this week where he predicts that recessions will be significantly rarer in the future.

http://www.themoneyillusion.com/?p=32350

It's interesting to think about.

Re: Airbnb raises $1B at $31B valuation, became profitable in 2016

#36

Post by imranq »

elastic_church wrote: post #22
muninn_ wrote: post #18

Earlier quoted context omitted.

Becoming a public company has it's own set of issues, though.

Yeah weird how people hold up IPO as a holy grail. Its the worst thing to do if you are actually passionate about the company, if it is your labor of love. Its the best thing to do if you want to make a lot of money from your money machine and are largely apathetic about the outcome of the business itself. Easy enough to find the next MBA graduate to feign passion for you while they are just trying to sell the compan…

why is this downvoted? every company I've worked at that has IPO'd companies has been, in my experience, soul-sucking.

Re: Airbnb raises $1B at $31B valuation, became profitable in 2016

#38

Post by alehul »

username223 wrote: post #25
alehul wrote: post #16

Earlier quoted context omitted.

Working for a company like Google, FB or even Airbnb or a questionable 'startup' is still much different than working for any other type of company. It's even markedly different than working for tech companies that would never be referred to as startups, such as Samsung, AMD or even HP. These large companies (FB, Google, etc) may no longer be bootstrapped and employees may no longer have versatile roles, but they sti…

"Nerd nurseries?" What do you even mean by "startup culture" in an ad-tech company with thousands of employees that has been doing the same thing for years? Open office plans with skateboards? Free food? Making the world a better place?

I don't mean this rudely -- is what I said offensive to people on HN? You're the first person to comment vs downvote as a reply and you seem to dislike FB quite a bit (and the idea of working for them).

Although Facebook as an individual product isn't creating any more value than it already has, the company includes Oculus VR and an AI lab which seem like they'd be fascinating places to work. Additionally, it just seems like an interesting, fun place to be where one could network with interesting people.

I'm not defending its dependence on ad-tech, but the experience (yes, including working conditions + benefits as you noted) seems closer to what I've found in small, new startups than companies like Samsung.

Re: Airbnb raises $1B at $31B valuation, became profitable in 2016

#39

Post by muninn_ »

elastic_church wrote: post #22
muninn_ wrote: post #18

Earlier quoted context omitted.

Becoming a public company has it's own set of issues, though.

Yeah weird how people hold up IPO as a holy grail. Its the worst thing to do if you are actually passionate about the company, if it is your labor of love. Its the best thing to do if you want to make a lot of money from your money machine and are largely apathetic about the outcome of the business itself. Easy enough to find the next MBA graduate to feign passion for you while they are just trying to sell the compan…

Yeah I lean toward this view as well. The point of an IPO is to raise capital. But when you do this, unless you own 51% of the company or there is a small group of like-minded individuals that own 51% of the company, you can wind up losing control and instead of doing things Wall Street doesn't like, you're going to have to focus on profitability and pleasing shareholders.

It's one route to take, but not the only one.

Re: Airbnb raises $1B at $31B valuation, became profitable in 2016

#40

Post by ojbyrne »

beefman wrote: post #31

We haven't had a recession in 8 years, and the postwar average time between recessions is 6 years.[1] The stock market's overall PE ratio is well above average.[2] With Box and Snap, the market demonstrated it is starving for tech IPOs -- even if a company is losing money and entirely based on a millennial fad. So why in the name of sweet baby Jesus would investors, founders, or anyone else delay an IPO at this point…

I would guess that its a combination of Sarbanes-Oxley and the glut of private capital available.
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