Ahead of IPO, Airbnb achieves profitability for second year in a row
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Re: Ahead of IPO, Airbnb achieves profitability for second year in a row
#2> "For starters, Airbnb says it was profitable on an EBITDA (earnings before interest, taxes, depreciation and amortization) basis for the second year in a row in 2018."
Not sure if this is financial engineering or if they're actually profitable, but I'm so curious to see how Wall St responds to this "profitability", especially since growth plays (e.g., FAANG) just cratered in Q4'18.
Not to get too involved in the dichotomy but I'm interested to see if AirBnB plays like a Snapchat (i.e., tons of hype then gets killed in the public markets), or more like a Dropbox (i.e., takes a bit of a haircut but share price remains fairly stable).
Re: Ahead of IPO, Airbnb achieves profitability for second year in a row
#3I plan on shorting Airbnb once it IPOs. It will only go down in the short term. Regulations were at an all time low and will slowly ramp up. For better or for worse, these regulations will hurt Airbnb.
I'd be curious to hear from anyone who seriously thinks Airbnb will be able to achieve substantial growth in the next 5 years, given the increasing likelihood of a slowdown and more regulations from large cities.
Re: Ahead of IPO, Airbnb achieves profitability for second year in a row
#4> "For starters, Airbnb says it was profitable on an EBITDA (earnings before interest, taxes, depreciation and amortization) basis for the second year in a row in 2018." Not sure if this is financial engineering or if they're actually profitable, but I'm so curious to see how Wall St responds to this "profitability", especially since growth plays (e.g., FAANG) just cratered in Q4'18. Not to get too involved in the di…
EBITDA is intended to reduce the possibility of "financial engineering".
Re: Ahead of IPO, Airbnb achieves profitability for second year in a row
#5> "For starters, Airbnb says it was profitable on an EBITDA (earnings before interest, taxes, depreciation and amortization) basis for the second year in a row in 2018." Not sure if this is financial engineering or if they're actually profitable, but I'm so curious to see how Wall St responds to this "profitability", especially since growth plays (e.g., FAANG) just cratered in Q4'18. Not to get too involved in the di…
Compared to snapchat, they have a much more compelling value proposition, and a much more robust monetisation strategy. I don't know what their valuation should be, but I can't see any comparison with snap.
Re: Ahead of IPO, Airbnb achieves profitability for second year in a row
#6I plan on shorting Airbnb once it IPOs. It will only go down in the short term. Regulations were at an all time low and will slowly ramp up. For better or for worse, these regulations will hurt Airbnb. I'd be curious to hear from anyone who seriously thinks Airbnb will be able to achieve substantial growth in the next 5 years, given the increasing likelihood of a slowdown and more regulations from large cities.
I will sell you the puts myself. You're ignoring a massive market for vacation rentals outside of major metropolitan areas that AirBnB has conquered from craigslist.
The risk for regulation has passed as citizens see AirBnB as an accepted reality. Hotels aren't happy, but rightfully see AirBnB as a competitor.
Re: Ahead of IPO, Airbnb achieves profitability for second year in a row
#7I plan on shorting Airbnb once it IPOs. It will only go down in the short term. Regulations were at an all time low and will slowly ramp up. For better or for worse, these regulations will hurt Airbnb. I'd be curious to hear from anyone who seriously thinks Airbnb will be able to achieve substantial growth in the next 5 years, given the increasing likelihood of a slowdown and more regulations from large cities.
I will sell you the puts myself. You're ignoring a massive market for vacation rentals outside of major metropolitan areas that AirBnB has conquered from craigslist. The risk for regulation has passed as citizens see AirBnB as an accepted reality. Hotels aren't happy, but rightfully see AirBnB as a competitor.
> The risk for regulation has passed as citizens see AirBnB as an accepted reality. Hotels aren't happy, but rightfully see AirBnB as a competitor.
I agree with your overall, but I'm not so sure I agree with this part.
South Lake Tahoe just passed a voter initiative in November that bans AirBnB (and VRBO) except for a few places right next to the major hotels. It was, not surprisingly, heavily supported by the major hotels.
Re: Ahead of IPO, Airbnb achieves profitability for second year in a row
#8I plan on shorting Airbnb once it IPOs. It will only go down in the short term. Regulations were at an all time low and will slowly ramp up. For better or for worse, these regulations will hurt Airbnb. I'd be curious to hear from anyone who seriously thinks Airbnb will be able to achieve substantial growth in the next 5 years, given the increasing likelihood of a slowdown and more regulations from large cities.
I have conflicting thoughts on this. In the US, it's true that in the near term regulations are likely to get more, rather than less onerous at the local and state level. At the federal level, I don't anticipate any changes in either direction until at least 2020, but probably longer, as this is the kind of issue that is generally hyperlocal as opposed to splitting entirely on party lines (the cynical view is that it's prone to capture).
That said, Airbnb's most promising growth opportunities aren't in the US in my opinion, they're international. While there's always a risk of regulation, the world is huge and has a lot of places who'd love to be this year's Iceland (although they might regret that 5 years from now) driven by cheap flights and/or housing.
Also - a slowdown could be counterintuitively good for Airbnb, as constituents may start lobbying to relax some of the more onerous regulations so that they can more easily make money via Airbnb (regardless of the accuracy, it can easily be cast as the hotel lobby vs. the recently unemployed family who has a room he wants to rent out).
Ultimately, I guess my position is that it's almost definitely overvalued right now, but not by as much as bears think it is and that I think they can probably remain a good business for the foreseeable future assuming good leadership.
Re: Ahead of IPO, Airbnb achieves profitability for second year in a row
#9I plan on shorting Airbnb once it IPOs. It will only go down in the short term. Regulations were at an all time low and will slowly ramp up. For better or for worse, these regulations will hurt Airbnb. I'd be curious to hear from anyone who seriously thinks Airbnb will be able to achieve substantial growth in the next 5 years, given the increasing likelihood of a slowdown and more regulations from large cities.
I will sell you the puts myself. You're ignoring a massive market for vacation rentals outside of major metropolitan areas that AirBnB has conquered from craigslist. The risk for regulation has passed as citizens see AirBnB as an accepted reality. Hotels aren't happy, but rightfully see AirBnB as a competitor.
> vacation rentals outside of major metropolitan areas that AirBnB has conquered from craigslist.
Last time I looked, many/most vacation rentals are multiply listed on VRBO, etc. Is there a reason to think that AirBnB is stickier than the other vacation rental sites?
Re: Ahead of IPO, Airbnb achieves profitability for second year in a row
#10I plan on shorting Airbnb once it IPOs. It will only go down in the short term. Regulations were at an all time low and will slowly ramp up. For better or for worse, these regulations will hurt Airbnb. I'd be curious to hear from anyone who seriously thinks Airbnb will be able to achieve substantial growth in the next 5 years, given the increasing likelihood of a slowdown and more regulations from large cities.
I have conflicting thoughts on this. In the US, it's true that in the near term regulations are likely to get more, rather than less onerous at the local and state level. At the federal level, I don't anticipate any changes in either direction until at least 2020, but probably longer, as this is the kind of issue that is generally hyperlocal as opposed to splitting entirely on party lines (the cynical view is that it…
The places where Airbnb has left to grow are more likely to enact legislation restricting their operation. The low hanging fruit is already picked.