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> I'm probably missing something, but I think the company is going down and they're pulling an exit scam. AirBnB is doing fine. They've posted healthy profits

> I'm probably missing something, but I think the company is going down and they're pulling an exit scam. AirBnB is doing fine. They've posted healthy profits for the past few years, which is more than can be said of nearly every other tech/startup company that has announced an IPO recently (Uber, Lyft, Pelaton, WeWork, Cloudflare, Slack, Postmates, and Pinterest are all unprofitable).

michalu 7y ago
They did post a healthy profit or rather shared earnings before tax with the media. But if there is no further growth potential such profits make the company worth way less than the most recent valuation even by NASDAQ standards which has inflated P/E. Even if that profit was after tax and amortization, etc. (which it wasn't) it's a tiny fraction of what booking.com makes while Airbnb is still charging higher fees.
bduerst 7y ago
Revenue is a better thermometer than profits here, especially since most startups leading up to an IPO manipulate their profits into looking great. It seems the regulatory product lifecycle is that AirBnB enters a new market, and then some time later that market starts to regulate and restrict it. How many new markets does AirBnB have left to exploit regulation?
- chimeracoder 7y ago
  > most startups leading up to an IPO manipulate their profits into looking great. They're clearly not - or if so, they're doing a pretty bad job at it, because most big-name tech startups that have announced IPOs have posted a track record of losses, not profits.
- pmart123 7y ago
  That’s not actually true. A certain real estate leasing firm could give away the first year on a three year commitment to book the revenue at a very high COGS, allowing for unsustainable revenue growth. The internet 1.0 had many great examples of this.
  - bduerst 7y ago
    True, but I didn't mean to say revenue was completely immune to the same manipulation - Microsoft was notorious for deferring windows revenue to show QoQ growth stability in the 90's, like you're eluding to. Still, there are fewer levers to manipulate revenue than profits, and I'd have more faith in that for AirBnB than profits.
    - pmart123 7y ago
      Well, I think in We's case, they are pulling revenue which should be deferred forward, but like the Dotcom companies, you can also grow revenue by selling $2 for $1, which shows up when your losses are growing more/close to your revenue growth. As you mentioned, net income can easily be massaged, adjusted EBITDA, etc. Cash flow is harder to fake. Airbnb should have decent to good unit economics though.
- the_watcher 7y ago
  > most startups leading up to an IPO manipulate their profits into looking great. What? This isn't true at all.
mrgordon 7y ago
Right. They are doing so well that many analysts expect them to do a direct listing which means they won't even be selling any shares in the public listing. They raised billions and now they make more money every quarter so there is no reason to raise more money unless there are specific larger acquisitions or expansions that can't be self-funded.
pmart123 7y ago
The successful travel portals typically all do well because there is so much value in filling demand so the room doesn’t go empty for the night.

michalu 7y ago

They did post a healthy profit or rather shared earnings before tax with the media. But if there is no further growth potential such profits make the company worth way less than the most recent valuation even by NASDAQ standards which has inflated P/E. Even if that profit was after tax and amortization, etc. (which it wasn't) it's a tiny fraction of what booking.com makes while Airbnb is still charging higher fees.

bduerst 7y ago

Revenue is a better thermometer than profits here, especially since most startups leading up to an IPO manipulate their profits into looking great. It seems the regulatory product lifecycle is that AirBnB enters a new market, and then some time later that market starts to regulate and restrict it. How many new markets does AirBnB have left to exploit regulation?

chimeracoder 7y ago
> most startups leading up to an IPO manipulate their profits into looking great. They're clearly not - or if so, they're doing a pretty bad job at it, because most big-name tech startups that have announced IPOs have posted a track record of losses, not profits.
pmart123 7y ago
That’s not actually true. A certain real estate leasing firm could give away the first year on a three year commitment to book the revenue at a very high COGS, allowing for unsustainable revenue growth. The internet 1.0 had many great examples of this.
- bduerst 7y ago
  True, but I didn't mean to say revenue was completely immune to the same manipulation - Microsoft was notorious for deferring windows revenue to show QoQ growth stability in the 90's, like you're eluding to. Still, there are fewer levers to manipulate revenue than profits, and I'd have more faith in that for AirBnB than profits.
  - pmart123 7y ago
    Well, I think in We's case, they are pulling revenue which should be deferred forward, but like the Dotcom companies, you can also grow revenue by selling $2 for $1, which shows up when your losses are growing more/close to your revenue growth. As you mentioned, net income can easily be massaged, adjusted EBITDA, etc. Cash flow is harder to fake. Airbnb should have decent to good unit economics though.
the_watcher 7y ago
> most startups leading up to an IPO manipulate their profits into looking great. What? This isn't true at all.

mrgordon 7y ago

Right. They are doing so well that many analysts expect them to do a direct listing which means they won't even be selling any shares in the public listing. They raised billions and now they make more money every quarter so there is no reason to raise more money unless there are specific larger acquisitions or expansions that can't be self-funded.

pmart123 7y ago

The successful travel portals typically all do well because there is so much value in filling demand so the room doesn’t go empty for the night.