2 ms·

AirBnb is a billion dollar business now? I thought that usually refers to revenue and not valuation, otherwise we'd call a bunch of startups without a product "

• mikeyouse 12y ago
  In finance circles, when companies are referred to as "Million/Billion Dollar Businesses" it's typically in terms of their market capitalization, which is consistent with the OP's title. Obviously we could quibble about the liquidity / depth of AirBnB's valuation, but it's pretty safely into the billion+ market cap realm. One example why it makes sense to use market cap. rather than revenue comes from post-bankruptcy GM. When they re-IPOed in 2010, GM's market cap was roughly $50B. However, in 2010, GM had $135B in revenue. Would anyone really argue that GM is a "$130 Billion Business" when you could purchase the entire firm for $50B?
  • Cookingboy 12y ago
    Not always. When Wall Street say "iPhone is a x billion dollar business for Apple" they refer to the revenue, not market share. When they say "SAAS is a X billion dollar business" they mean revenue, not the combined market cap of all SAAS companies. But yes, I think it can be ambiguous.