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Airbnb’s Stunning IPO

nytimes.com

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Re: Airbnb’s Stunning IPO

#211

Post by tyre »

say_it_as_it_is wrote: post #203
chasedehan wrote: post #163

Earlier quoted context omitted.

This was the second largest "money left on the table" from an IPO. Jay Ritter's document shows how much AirBNB could have picked up if they had priced their IPO appropriately. https://site.warrington.ufl.edu/ritter/files/Monnew.pdf

Can someone please explain the winners and losers of this $3.9 Billion discrepancy?

AirBnB is the loser; people who bought at the IPO price are the winners.

Let's say a company IPOs by selling 1,000 shares at $1/share. An investor buys them all. Opening bell rings and demand let's that investor sell shares at $2/share.

So the company sold 1,000 shares for half of what people were willing to pay. The investor bought shares at half the price they could sell them for.

Re: Airbnb’s Stunning IPO

#212

Post by lozaning »

say_it_as_it_is wrote: post #203
chasedehan wrote: post #163

Earlier quoted context omitted.

This was the second largest "money left on the table" from an IPO. Jay Ritter's document shows how much AirBNB could have picked up if they had priced their IPO appropriately. https://site.warrington.ufl.edu/ritter/files/Monnew.pdf

Can someone please explain the winners and losers of this $3.9 Billion discrepancy?

AirBnB is the loser because they could have gotten that money, the people who got to buy at the initial IPO price are the winners because they got those billions.

This is akin to AirBNB selling dollars for 50 cents.

Re: Airbnb’s Stunning IPO

#213

Post by localhost »

11thEarlOfMar wrote: post #154

I recall that Facebook's first day closed at or near the offer price: Opened at $38 and closed at $38.23. That's a masterful IPO pricing accomplishment, meaning, FB left $0.23 per share on the table. Moreover, the stock traded below the open for 5 quarters before starting it's impressive rise. Even with that pause, buying at the open and holding till now would have yielded nearly 27% annualized return. It's just my o…

I really wonder who all the sellers were in the IPO. In my case, were I to get allocation from my broker (I didn't) I would be subject to a 15 day holding period. Presumably the institutional investors that got the lions share of the $68 allocation weren't subject to this holding period? I read somewhere else that ABNB employees were allowed to sell 15% of their holdings at IPO? Perhaps that's where another initial set of shares that hit the open market came from?

Re: Airbnb’s Stunning IPO

#214

Post by andy_ppp »

therealx wrote: post #196
whimsicalism wrote: post #81

Earlier quoted context omitted.

This is basically how I rent and I've also had great experiences. I have rented a "non-Whole place" and I would say that was a pretty bad experience. Our room was supposed to be the only Airbnb, but two nights in, they rented out a room with a frosted glass separator next to us as "420 friendly" and the couple that moved in proceeded to have quite loud sex. We gave them pretty scathing reviews, which I am not wont to…

Ha, that may beat my weird one. I was with an ex, and we rented a room in a home across from Golden Gate park. We cleared with the resident that we would be back around 2am, and that it would be fine. At 2am, they got mad at us for making so much noise. THEN at 6am, they start blasting some ethnic music as they proceeded to fry food for hours and party. Turns out they were VERY Jewish and were celebrating the Sabbath…

Exactly, I think sharing homes with the whole population is very problematic as on average you’ll get a lot of people who aren’t really into Airbnb as a concept and don’t really care.

Getting home at 2am happens, if you don’t like it don’t rent rooms for money. In my head I edited out the expletives from that sentence :-|

Re: Airbnb’s Stunning IPO

#215

Post by tomjakubowski »

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…

Petco is well established (founded 55 years ago), based primarily in brick and mortar retail, and don't try to market themselves as a tech or "dotcom" company. We may be in a bubble, but I don't think their IPO is comparable to Pets.com of the dotcom era.

Re: Airbnb’s Stunning IPO

#216

Post by igeligel_dev »

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…

I think the post COVID-19 phase will actually be good for them in that regard. Companies switch to remote, at least a bit and cities will empty a bit more. This might make some more space for permantent tenants. But could be also completely wrong about that.

Re: Airbnb’s Stunning IPO

#217

Post by actuator »

triceratops wrote: post #208
tc313 wrote: post #180

Earlier quoted context omitted.

> The narrative between those two scenarios is drastically different. Who cares about the narrative unless you need to raise capital again soon? The money you get in an IPO actually goes into the business, while the trading price of the stock has no impact on the business.

Airbnb employees get paid in stock. For many it may be as much as 40% of their total compensation. If the price drops, those employees are going to be very upset. The trading price matters very much.

Only the ones who join now. I am sure the pre IPO employees are more than happy.

Re: Airbnb’s Stunning IPO

#218

Post by supergirl »

11thEarlOfMar wrote: post #154

I recall that Facebook's first day closed at or near the offer price: Opened at $38 and closed at $38.23. That's a masterful IPO pricing accomplishment, meaning, FB left $0.23 per share on the table. Moreover, the stock traded below the open for 5 quarters before starting it's impressive rise. Even with that pause, buying at the open and holding till now would have yielded nearly 27% annualized return. It's just my o…

it's not like they can just ask any price they want. they have to negotiate with the initial investors. if they have no investors then there is no IPO. plus, the IPO consisted of only 7% of shares right? they prob have a lot more to sell if they want, at the higher price.

Re: Airbnb’s Stunning IPO

#219

Post by triceratops »

actuator wrote: post #217
triceratops wrote: post #208

Earlier quoted context omitted.

Airbnb employees get paid in stock. For many it may be as much as 40% of their total compensation. If the price drops, those employees are going to be very upset. The trading price matters very much.

Only the ones who join now. I am sure the pre IPO employees are more than happy.

Pretty sure they've been paying pre-IPO employees in RSUs for a while by now. Most late-stage companies stop paying options at a certain point. And even the pre-IPO employees will need to be paid RSUs in the future to retain them.

Re: Airbnb’s Stunning IPO

#220

Post by justapassenger »

11thEarlOfMar wrote: post #154

I recall that Facebook's first day closed at or near the offer price: Opened at $38 and closed at $38.23. That's a masterful IPO pricing accomplishment, meaning, FB left $0.23 per share on the table. Moreover, the stock traded below the open for 5 quarters before starting it's impressive rise. Even with that pause, buying at the open and holding till now would have yielded nearly 27% annualized return. It's just my o…

It's not that easy to extract all the money from IPO in a market that's in the bubble. You need institutional investors to agree. They are somehow reasonable, at least compared to what happens on the first day. Once trading starts, you'll have robinhood crowd pumping the price, without any understanding of valuation. They only know that stonks go up, so better buy early! And hedge funds that understand that behavior will also make sure to get their piece of cake.
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