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> "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
by rayvy 8y ago
> "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).
- techscruggs 8y agoEBITDA is intended to reduce the possibility of "financial engineering".
- danmaz74 8y agoCompared 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.
- the_watcher 8y ago"profitable on an EBITDA basis" is about as mainstream a finance metric there is outside of the basic GAAP metrics (and many regard EBITDA to be more reliable than GAAP).
- Traster 8y agoI think We Work did a great job of destroying mainstream understanding of EBITDA with their 'community adjusted EBITDA' which took a well defined term and made it part of completely meaningless term.
- the_watcher 8y agoYes, "Community-adjusted EBITDA" is a nonsense metric. That said, it is not EBITDA, and given that WeWork is still private, I don't see any reason to believe the average person has had their conception of EBITDA irreparably damaged by it (or even impacted at all).
- forkLding 8y agoShould be pretty reliable metric, they're not an asset-heavy company (aka they don't own a lot of property etc.) so depreciation isn't likely to be a major part of their expenses anyway. Most companies are evaluated based on EBITDA as well anyways
- bboreham 8y ago“Earnings Before Bad Stuff”