Airbnb’s Stunning IPO • Hacker News Board

Re: Airbnb’s Stunning IPO

#111

Post by designium » Fri, Dec 11, 2020, 5:14 PM UTC

grailed wrote: post #8

I hear a lot of talk surrounding their "moat" and many skeptics are questioning whether or not they will be able to maintain their competitive advantage. However, it feels like Airbnb has solved a truly hard problem: how to make people trust your service. People are using this app to go stay in random people's homes. How often do you hear people talk about being murdered in uber? I still hear it. How often do you hea…

Not exactly true:

https://toronto.ctvnews.ca/police-identify-three-men-killed-...

Re: Airbnb’s Stunning IPO

#112

Post by jartelt » Fri, Dec 11, 2020, 5:15 PM UTC

Nelkins wrote: post #64

As someone whose main exposure to stocks is investing via retirement accounts, can someone explain if they're really leaving $4 billion on the table? Can't they just issue/sell more stock to drive down the price to their originally targeted price? Or is that some kind of breach of fiduciary duty (or something else)?

They sold X number of shares in the IPO at at $68 per share price and then the next morning, shares were selling at >$130 per share. The money left on the table is due to them selling at $68 when they likely could have sold for high (given the pent up demand).

Some people argue that they wouldn't have been able to sell all X shares at $130 per share. That may be the case, but it's really hard not to think the $68 price was way too low.

You can issue more shares to raise more money and drive the price down, but you never can undo the discount you gave the IPO investors.

Re: Airbnb’s Stunning IPO

#113

Post by dorchadas » Fri, Dec 11, 2020, 5:15 PM UTC

tudorizer wrote: post #26

grailed wrote: post #8

I hear a lot of talk surrounding their "moat" and many skeptics are questioning whether or not they will be able to maintain their competitive advantage. However, it feels like Airbnb has solved a truly hard problem: how to make people trust your service. People are using this app to go stay in random people's homes. How often do you hear people talk about being murdered in uber? I still hear it. How often do you hea…

There are plenty of horror stories, even if not directly murder. Rending out a nice, luxurious/novel holiday home is the story they sell, but that's far from the bulk. They enable a secondary, dodgy market in a lot of towns around the world.

A market that's driving out long-term rentals and causing lots of issues for the people who actually live in the towns as well.

Re: Airbnb’s Stunning IPO

#114

Post by ghaff » Fri, Dec 11, 2020, 5:15 PM UTC

virgil_disgr4ce wrote: post #106

ionwake wrote: post #98

As a great fan of airbnb having stayed 10 times in Denmark in different ones, I was suddenly burned by a fake review from a first time host ( she got into trouble with her housing association I think ). She destroyed my feedbacks "image" with made up statements in her statement. After several appeals airbnb did not help at all. I got so burned that I still don't quite understand whether I was unlucky or failed to rea…

My gf has had two shitty experiences with AirBnB's "community leaders" in response to two completely unjustified reviews of her place. Anybody can just suddenly decide that they had a terrible time and that it's the fault of the property, and AirBnB seems predisposed to take the visitors word for it. If they keep that up they're not going to have any renters.

To be fair though, at least depending upon the details, what is AirBnB is supposed to do? If they remove negative reviews because they're outliers, that sounds like what people accuse Yelp of doing. A lot of complaints can be pretty subjective. It's also pretty common for marketplaces to take the side of buyers in general.

Re: Airbnb’s Stunning IPO

#115

Post by greggman3 » Fri, Dec 11, 2020, 5:18 PM UTC

andy_ppp wrote: post #72

iandanforth wrote: post #60

Earlier quoted context omitted.

Because I've had the opposite experience would you be willing to share how you pick places? I rent: "Whole places", with a strong bias towards detached buildings, that rate 4.7 or higher on their scale, and have glowing reviews that mention how nice the host is. These are almost always $90/night or more, with an average of $120/night.

I’m not sure, now that I can afford a nicer place I usually book a hotel due to my previous experience. Maybe I should increase my price ranges and try again, but the key problem just means I really cannot be bothered. If they had places around town to get the keys from I’d be much more likely to use it again. Having said that places usually are over £90 per night but this is very place dependant.

I've rented about 20 whole places. 50% had issues. 50% were good. Prices were almost always is the $120-$150 a night range. Examples of bad: claiming to have reserved parking but not having parking. Claiming to be one place but being another. Claiming to have usable internet but not. Claiming to have a bed but just having a cot. etc...

At this point I'd mostly choose hotels over AirBnB because generally a hotel will try to fix an issue but AirBnb never will. Their position is effectively "sucks to be you, you shouldn't have chosen that listing".

They policy is basically "unless it's life threatening shutup!" and the worst part is either you suck it up or you're out a day of your vacation travel etc as you try to scramble to find another place. It's not fun.

Re: Airbnb’s Stunning IPO

#116

Post by fullshark » Fri, Dec 11, 2020, 5:19 PM UTC

tempsy wrote: post #93

fullshark wrote: post #87

Earlier quoted context omitted.

Semantics. If I buy your car for half its value guaranteed, you will regret it, and you basically handed me 1/2 its value.

No one really knows what is tolerated by public markets right now. Tech stocks are in a speculative bubble caused by zero rates and a flood of money from the Fed. It isn’t as if Airbnb can’t sell more shares at $150 now in a secondary offering if they wanted to. The IPO is just one point in time.

Sure, and Airbnb bet incorrectly, leaving money on the table.

Re: Airbnb’s Stunning IPO

#117

Post by jartelt » Fri, Dec 11, 2020, 5:20 PM UTC

pavlov wrote: post #67

Nelkins wrote: post #64

As someone whose main exposure to stocks is investing via retirement accounts, can someone explain if they're really leaving $4 billion on the table? Can't they just issue/sell more stock to drive down the price to their originally targeted price? Or is that some kind of breach of fiduciary duty (or something else)?

Yes, the company can do a secondary offering after its IPO, and it's pretty common. I think the hype around the IPO will help them do a secondary next year, so in that sense the low initial price is like a marketing tool for future stock. Also, Airbnb (like other tech companies) is issuing quite a lot of new stock in the form of RSUs used to pay employees. This constant dilution benefits from the high stock price.

You don't leave billions on the table to generate hype. You could just as easily raise the extra billions in the IPO and then spend $100 million in ads to generate hype (and it would be much cheaper).

Re: Airbnb’s Stunning IPO

#118

Post by treis » Fri, Dec 11, 2020, 5:21 PM UTC

ricotico060 wrote: post #2

For some reason, I just feel this price is too high for them and that it will fall in the coming 2-3 months. Then again, I think about their business model and there’s a lot to like: the don’t own any real estate and if they really wanted to, they could likely let go most of their staff and have a team of maybe 60 - 100 people run the bussiness as it mostly revolves around simply managing the app and keeping it runni…

>For some reason, I just feel this price is too high for them and that it will fall in the coming 2-3 months.

They've got a lot going for them they are:

A verb now like Google or Zoom.

The dominant player in a global 2 sided market

Potential major competitors (i.e. AirBnB by Marriott) are blocked by legal complications

They're going to be very profitable for a long time. A 100billion valuation is a tall order as it implies that, at some point, you start generating 10 billion a year or so in cash flow. But I can see them doing that.

Re: Airbnb’s Stunning IPO

#119

Post by dorchadas » Fri, Dec 11, 2020, 5:21 PM UTC

rafiki6 wrote: post #92

jpalmer wrote: post #31

Market cap now exceeds top 5 US hotel chains combined. How much can it grow from here?

Two arguments can be made. On the one hand, there are definitely more private places to be rented out then there are hotel rooms in those 5 chains. On the other hand, I'm not entirely sure that Airbnb can ever be profitable enough with all of those rentable places to justify the cost, especially since much of their stock is misused long term rental capacity that many municipalities are cracking down on now. So yes, i…

> especially since much of their stock is misused long term rental capacity that many municipalities are cracking down on now.

And thank heavens they are. I've been on the suffering end of trying to find a place to rent before but couldn't due to everyone preferring AirBnB for long term rental properties as they could make more money. I won't say it's the root cause of housing crises in cities worldwide, but it's definitely a major contributor, as you have the same number of people now fighting over less area. The quicker AirBnB gets regulated to go back to being a place to rent out a spare room, the better.

Re: Airbnb’s Stunning IPO

#120

Post by toby » Fri, Dec 11, 2020, 5:23 PM UTC

solutron wrote: post #11

2x IPO strike price in first day of trading after $613M recouped stock options after the layoffs. Stock consolidation and 180 day lock up period creates a big risk for when employees sell. Lots of them probably have tens of thousands of shares, exercised them very cheaply, and will want to offload them. I'm not going to touch this stock with a 10-foot pole. I do wish I could short this stock but options aren't availa…

Everyone says this about the lock up and it makes sense intuitively, but it doesn't really match the data. I saw a presentation by a major investment bank that showed that in most cases there is not a significant drop following the lock up expiration -- I'm sure there are examples either way, but this was a compelling basket.