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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

#71

Post by xeromal »

heurist wrote: post #60
conanbatt wrote: post #57

Earlier quoted context omitted.

What im not sure about is Airbnb's moat. They have a great brand name and all, but their service is very limited: 15% is a very large cut to take on these transactions. What prevents another company from doing the same at 12% and costing 50% to operate?

Their social network and brand recognition is their moat for now. Hosts and guests trust Airbnb. An upstart will have overcome a lot of momentum to take on Airbnb in the broad market.

The reviews are worth the price of admission

Re: Ahead of IPO, Airbnb achieves profitability for second year in a row

#72

Post by longerthoughts »

matchbok wrote: post #61

Amazing what a company can do when they ignore regulations and simply extract wealth out of our communities. 80% of their profit comes from huge corporate listings yet they advertise themselves as a "home-sharing" site. Nonsense.

> they ignore regulations and simply extract wealth out of our communities

Can you elaborate on this?

Re: Ahead of IPO, Airbnb achieves profitability for second year in a row

#73

Post by rexpop »

cycrutchfield wrote: post #66
matchbok wrote: post #61

Amazing what a company can do when they ignore regulations and simply extract wealth out of our communities. 80% of their profit comes from huge corporate listings yet they advertise themselves as a "home-sharing" site. Nonsense.

>extract wealth out of communities Yeah, you don’t have an axe to grind here, I’m sure.

What's that supposed to mean? Do you think this person was the literal, direct victim of such practices, and as such "has a [personal] axe to grind?" If so, although it exhibits bias, it also exhibits the phenomenon.

That being said, there are _many_ communities upset by AirBnB's influence on their area. Example: https://www.theadvocate.com/new_orleans/news/article_ad1c91a...

Of course, Googling for that article turns up, primarily, AirBnB listings in New Orleans.

Re: Ahead of IPO, Airbnb achieves profitability for second year in a row

#74

Post by rifung »

aboutruby wrote: post #50
adventured wrote: post #16

It's going to be interesting to watch Airbnb IPO at just below the valuation of Priceline.com / Booking Holdings, while Priceline has 3x the revenue and 50-100x the profit. That's a helluva bet on Airbnb still having immense growth left in the tank, as the IPO valuation is already pulling at least five or six years of growth forward.

Booking is at 78.68B. From first hand experience I think Airbnb's technology is at least 10x better than Booking's (I visited and talked to both Airbnb and Booking.com employees in their respective offices).

> I think Airbnb's technology is at least 10x better than Booking's

Perhaps a cynical or unpopular point of view but until the technology becomes a hindrance, does that really matter? Its not as though people are going to these sites because they have great technology. They go to them because the prices are good and they have good UX I assume?

Re: Ahead of IPO, Airbnb achieves profitability for second year in a row

#75

Post by matchbok »

cycrutchfield wrote: post #66
matchbok wrote: post #61

Amazing what a company can do when they ignore regulations and simply extract wealth out of our communities. 80% of their profit comes from huge corporate listings yet they advertise themselves as a "home-sharing" site. Nonsense.

>extract wealth out of communities Yeah, you don’t have an axe to grind here, I’m sure.

I have an axe to grind against mini-hotels that operate without regulation that raise rents for everyone while providing massive money to a small number of interests.

So yeah.

Re: Ahead of IPO, Airbnb achieves profitability for second year in a row

#76

Post by hammeiam »

calgaryeng wrote: post #53
aboutruby wrote: post #47

Valued at $31 billion in 2017, raised $4.4 billions. Probably at least worth between 50 and 100 billions now, I would say $80-$120 billions. YC will be funded for a couple centuries with that IPO.

Just an FYI from a native english speaker - sums of money do not use the plural version of the value unit. i.e. should be "raised $4.4 billion" not "raised $4.4 billion s "

I would debate the phrasing of that answer. The value unit ($) is implicitly pluralized. Fully written out, that phrase would be "four point four billion dollars". The value unit is pluralized, but the numbers are not pluralized.

Re: Ahead of IPO, Airbnb achieves profitability for second year in a row

#77

Post by mbesto »

gringoDan wrote: post #43

They're often considered similar businesses, but intuitively it seems to me that, long-term, Airbnb will be valued higher than Uber and other ridesharing companies. Home rentals seem to be simpler market to operate in than coordinating real-time supply and demand between drivers & riders. Additionally, Uber seems to be facing issues on the driver side of the business - they have a $650 driver acquisition cost & a 12%…

They're compared because they own the distribution in their respective markets. That's key.

That being said, here are the risks on the supply side for both in very different ways:

- Uber: Drivers are fungible and can move to any platform they want. Two risks here...unbundling (already happening) and driver acquisition cost.

- ABnB: If their supply bundles itself together, it doesn't need to pay a distribution fee and ABnB is done.

Re: Ahead of IPO, Airbnb achieves profitability for second year in a row

#78

Post by beager »

refurb wrote: post #28

Profitable by EBITDA could be profit of $1. Current valuation? Who knows, but I see ~$30B being mentioned in a few media reports. Assuming that AirBnB eventually becomes an enormous, stable, established company with a P/E ratio of ~15, that would mean ~$2B in profit per year. Will be interesting to see if they achieve that!

EBITDA of $1 (or anything) doesn't tell me anything unless I understand what the prior period EBITDA were.

- Were they also $1 in the prior period on EBITDA? That would indicate that their growth is stalled and they can't fix profitability problems. An IPO could help address that with the right allocation of raised funds, maybe.

- Did they lose $1 billion on EBITDA in the prior period? That would indicate that they've rapidly solved their profitability issues, but an IPO might indicate that they're overvalued and want to dump that problem on the market so that they can correct down to a good market cap vis a vis their earnings.

- Did they make $1 billion on EBITDA in the prior period? An IPO would indicate investors scrambling for the exits.

And so on. Even if earnings are paltry compared to their scale, if they are massively improved over the prior period, that is a potentially good indicator of performance to come.

Re: Ahead of IPO, Airbnb achieves profitability for second year in a row

#79

Post by polskibus »

gringoDan wrote: post #69
conanbatt wrote: post #57

Earlier quoted context omitted.

What im not sure about is Airbnb's moat. They have a great brand name and all, but their service is very limited: 15% is a very large cut to take on these transactions. What prevents another company from doing the same at 12% and costing 50% to operate?

Nothing prevents another company from doing that, but all of the hosts & guests are already on Airbnb. Two-sided marketplaces are very difficult to start, but once they have some momentum, it's even more difficult to unseat them. Look at Craigslist - terrible UI, hundreds of startups have tried to challenge it in the past 15+ years, and yet it's still my go-to when I need to sell some old furniture.

Moreover, booking.com existed long before Airbnb and is still going strong!

Re: Ahead of IPO, Airbnb achieves profitability for second year in a row

#80

Post by golemiprague »

matchbok wrote: post #61

Amazing what a company can do when they ignore regulations and simply extract wealth out of our communities. 80% of their profit comes from huge corporate listings yet they advertise themselves as a "home-sharing" site. Nonsense.

Which just comes to show that those regulations were stupid in the first place. Let's face it, a lot of the wealth they extract is out of big chain hotels, not the "community" and it is actually good that this wealth spread across the board rather than within few hotel chains.
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