Airbnb’s Stunning IPO

I recall that Facebook&#x27;s first day closed at or near the offer price: Opened at $38 and closed at $38.23. That&#x27;s a masterful IPO pricing accomplishment, meaning, FB left $0.23 per share on the table.<p>Moreover, the stock traded below the open for 5 quarters before starting it&#x27;s impressive rise. Even with that pause, buying at the open and holding till now would have yielded nearly 27% annualized return.<p>It&#x27;s just my opinion, but ABNB missing by more than 100% ($140 close vs. $68 open) is a major fail on the part of their CFO.<p><a href="https:&#x2F;&#x2F;www.businessinsider.com&#x2F;facebook-stock-price-ipo-6th-anniversary-2018-5" rel="nofollow">https:&#x2F;&#x2F;www.businessinsider.com&#x2F;facebook-stock-price-ipo-6th...</a>

Another strong argument in favor of doing a direct listing to determine market price (and raising privately beforehand if possible).<p>Anytime one party does a transaction repeatedly as their job and one party does a transaction once (maybe twice) in their life, the transaction will be structured to favor the first group (along with a compelling narrative&#x2F;PR of why this is not the case).<p>Airbnb lost out here. It&#x27;s easy to discount since people are happy to have made money, but I&#x27;m not sure this was a stunning IPO considering that. If I was on the company side, I&#x27;d be pissed at the initial pricing and the money that was left on the table.<p>The counter narrative is that pricing is hard and the banks try to do the best they can (with a slight preference for under pricing to benefit themselves). This is probably closer to the truth, but there&#x27;s a lot of evidence that they&#x27;re just not good at it.<p>It&#x27;d be interesting to see some clause that if the banks mis-priced by some X% the partners would have to sell and give 50% back to the company. Though I suspect even this wouldn&#x27;t help because market price is hard to predict even if you&#x27;re incentivized to try your best.<p><a href="https:&#x2F;&#x2F;podcasts.apple.com&#x2F;us&#x2F;podcast&#x2F;bill-gurley-direct-listing-vs-ipo-invest-like-the-best-ep-144&#x2F;id1154105909?i=1000451016956" rel="nofollow">https:&#x2F;&#x2F;podcasts.apple.com&#x2F;us&#x2F;podcast&#x2F;bill-gurley-direct-lis...</a>

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

The reaction of the markets to Airbnb&#x27;s IPO is definitely an echo of the dotcom days.<p>The only question is, is Airbnb&#x27;s IPO equivalent to Netscape (ie. near the beginning of the boom) or Pets.com (near the end). Only time will tell I suppose.

It’s SoftBank.<p>Retail is being blamed. But there aren’t enough retail dollars, nor enough odd-lot trading, to explain these deltas.

As someone whose main exposure to stocks is investing via retirement accounts, can someone explain if they&#x27;re really leaving $4 billion on the table? Can&#x27;t they just issue&#x2F;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)?

It is a misconception that when a company IPOs and the stock pops, that the delta is money left on the table. The vast majority of the shares are sold to institutional investors. There are explicit or implicit lock-up periods in place. And most of the pre-IPO investors will typically have a 6-month lockup. So if 10% of shares are sold in the IPO and 10% of those shares are actually trade-able, only 1% of the total stock is liquid. That can lead to very large price swings (i.e. the pop).

and I thought they were struggling because everyone is staying home due to Covid...

AirBnB units should have to pay the same tax burden as any other accommodation. Then we can see how that works with their margins.

I bought at $146 and feel ok at that price for a long play.<p>I see regulation as the major risk.<p>But getting millions of people to trust you with their homes is one hell of a moat.<p>Everything about the post-pandemic world favors AirBNB. - Remote&#x2F;Mobile workers. That alone is gonna make them an incredible amount of money. This isn&#x27;t ever going to change. - Pandemic housing boom. People are buying at unprecedented rates. This is money leaving cities. This is a generation of global-minded, young internet-savvy buyers. AirBNB wins here. - Economic recession &#x2F; unemployment. Everyone who _does_ own a home and finds themselves in financial trouble is going to consider renting a room. It&#x27;s an obvious move and I think the job market will have at-risk homeowners considering this move en masse.

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&#x27;m not going to touch this stock with a 10-foot pole. I do wish I could short this stock but options aren&#x27;t available for it yet.

Talk about setting the wrong price for their stock. Looks like airbnb just handed over boatloads of money to wall street.

I haven’t been following this but isn’t this a value gap that is more like a chasm that whoever underwrote this captured at the cost of the business?

What is the danger of IPO being significantly higher than estimated?

All my experiences using Airbnb have been terrible and their apps&#x2F;website are the slowest I&#x27;ve ever seen in a <i>tech</i> company.<p>But I think the price is reasonable because the Fed printing machine won&#x27;t stop and US has long lost the opportunity to ever increase interest rate so everything will just pop up like end of world, e.g. what has Apple done this year so they are now worth 1 trillion more than last year? Thus 60b for Airbnb is basically the same as 30b last year.<p>tl;dr: if your asset doesn&#x27;t pop 100% this year, you are a fool.

I hear a lot of talk surrounding their &quot;moat&quot; 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.<p>People are using this app to go stay in random people&#x27;s homes. How often do you hear people talk about being murdered in uber? I still hear it. How often do you hear it for Airbnb? I haven&#x27;t heard someone express that worry yet.<p>They&#x27;ve solved the trust and the brand issue, and _that_ is their moat.

I decided I&#x27;d had it with Airbnb a couple of years ago now and mostly haven&#x27;t looked back. I prioritize more traditional hospitality options now.<p>I&#x27;ll save a long diatribe and instead say that when I added up the little details I didn&#x27;t like about the platform, and the ways I&#x27;d fix them, I&#x27;d &quot;invented&quot; ... a hotel.<p>It may be my age now (over 30), but I&#x27;ve come to value knowing that Hilton uses a certain type of bedsheet in <i>all</i> their rooms over &quot;Alfred&#x27;s converted garage looks like it has a quirky sense of style!&quot;<p>I&#x27;ll hand it to Airbnb on this though: the &quot;experiences&quot; feature they introduced right as I was getting fed up with them is pretty neat.

Some of my experiences with airbnb, always a guest not an owner:<p>Bads - Had a really bad house with cabinet doors torn off the cabinets, trash in the garage, place was a total dump. Stayed one day and got the rest of my money back. Another place had a bad mouse infestation, this was dealt with by the owner but it was still pretty shocking as I have never lived or stayed in a place that had a single mouse my entire life.<p>Goods - Right before the pandemic hit had a really good string of excellent airbnbs that were all cancelled last minute, the thing with airbnb is, great places are always booked, we just got lucky as people were scared and stopped traveling(early march).<p>Ugly - Alot of owners now are pulling a perfectly legal scam of listing a place at a certain price point and then charging an extremely high cleaning fee. When booking it, you are then shocked by the extreme fees, one place (5 days stay) was charging $400 for their cleaning fee.<p>Takeaways - If you do your own cooking and don&#x27;t mind cleaning up airbnb is great for you. As a parent its great as I don&#x27;t have to deal with a hotel lobby or elevators(I always book standalone houses). As for price its roughly even with hotels, a few years back it was typically 40-50% cheaper.

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 &quot;image&quot; with made up statements in her statement.<p>After several appeals airbnb did not help at all.<p>I got so burned that I still don&#x27;t quite understand whether I was unlucky or failed to reach the right person, but Ive been too taken aback to start again with a new profile.

Airbnb is great until you get a bad experience. For hotels, there is a floor for bad experiences - it can only get so bad, and the customer service is usually decent. I used airbnb until I had a single terrible experience and worse customer service that did not help me because I had no proof of the incident. Been using hotels ever since.

I pretty much stopped using Airbnb after getting a bad review from a host for “not tidying up” - what exactly is the large <i>cleaning</i> fee for? So paying almost hotel prices for less than hotel level service seems like a pretty bad deal. Particularly when the host wants you to also jump through hoops to avoid getting busted by the homeowners or tenants association...

Great company. Changed my traveling life. Way awesome for longer stays.

25% of AirBnB staff was cut in 2020. Many may still be unemployed. For those who are struggling, please accept my deepest condolences at this time.

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 running. I’m curious how “Moated” their bussiness will turn out to be. I don’t really see competition will cut in that much as Airbnb has such an head start and established brand. The only big question I have left is legality. My family works in the hotel bussiness and is required to do fire alarm checks and all sorts of other checks to prove that he is safe to customers. Will Airbnb one day be required to do this? Only time will tell.