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Airbnb Raises $1.5B in One of Largest Private Placements
- deleted 11y ago[deleted]
- fruitfulfrank 11y agoYou need an account to read.
- tristanho 11y agoYou can read it via https://www.google.ca/search?q=Airbnb+Raises+%241.5+Billion+in+One+of+Largest+Private+Placements https://www.google.ca/search?q=Airbnb+Raises+%241.5+Billion+... if you're so inclined... the article is pretty dry though.
- mrgordon 11y agoThe gist is that they are valued at $24 billion pre-money/$25.5 billion post-money and are growing insanely quickly :)
- aikah 11y agofixed : https://archive.is/P7JPO https://archive.is/P7JPO By the way what's up with these strange urls in the bottom of several news site? some are blocked by my ad blocker yet they seem to belong to the same website. Why do websites also use these strange networks like outbrain and co to link to their own content?
- msoad 11y agoI wonder how this impact employee options? They still need to wait another 3-4 years for IPO to see what their options really worth. There is also a big chance of a massive reverse stock split for a company with this many rounds of investments.
- mrgordon 11y agoWhy do you think there'd be a reverse stock split? The price has been going up, not down. Or you think it would happen to get around the shareholder limit pre-IPO?
- msoad 11y agoYes, to make the numbers work for each round they usually split the stocks.
- erichurkman 11y agoThis is far less common than you would think. The vast majority of rounds are raised by the company's board and shareholders approving additional stock to be issued.
- mrgordon 11y agoI would expect them to simply issue additional shares.
- erichurkman 11y agoStock splits do not change ownership or value. If you own 10 shares pre-split valued at $1 per share, and you have a split 10-for-1, you now own 100 shares worth $0.10 per share. In general, companies do reverse splits prior to an IPO to push up the share price. It's seen favorably to have a $50.00 IPO price per share vs $5.00 even though the overall value is the same – the headlines read better that your IPO debuted at $50 but increased to $60 vs an increase of $5 to $6.
- mrgordon 11y agoAccording to Wikipedia, reverse stock splits remove everyone with less than the split factor from the cap table. So if it was a 10-to-1 reverse split then you'd need at least 10 shares or you'd get paid out in cash https://en.wikipedia.org/wiki/Reverse_stock_split#cite_note-3 https://en.wikipedia.org/wiki/Reverse_stock_split#cite_note-...
- staunch 11y agoImagine if every Airbnb host had the option of having 5-10% of their earning withheld and used to purchase equity. You'd have a lot of regular people (that helped build the business!) receiving a windfall, instead of a few rich jagoffs getting a bit richer. And on the downside there would be no serious harm. IPOs are finished. Crowdfunding with equity can't come soon enough.
- dopamean 11y agoWhat reason would Airbnb have to do this?
- staunch 11y agoWhy not? The financial terms could be roughly identical. Having your users be your stockholders seems like a huge advantage in a lot of ways.
- foobarqux 11y ago> The financial terms could be roughly identical. In what way would giving away shares to employees be the same as keeping them as an asset of the company?
- staunch 11y agoThey're already going to sell the equity to someone. Airbnb could sell equity to its users instead of private equity groups.
- jdoliner 11y agoCompanies generally expect to get a lot more than just money from their early investors. This is definitely a nifty idea for giving people an incentive to participate in a nascent 2 sided market. However it's not quite a no brainer as you're describing, there are trade offs here.
- deleted 11y ago[deleted]
- bsder 11y agoLooks like a Chinese buyout, no? Presumably a good way to get wealth out of China and then clean the money with an IPO. Timely, given the bubble popping in China.
- adventured 11y agoNo, it's not a Chinese buyout. You're talking about the acquisition of maybe 2% to 3% of their equity. It's meaningless in that regard. There are two companies in China that could afford to buy Airbnb, that would be reasonable potential buyers. Tencent and Alibaba, neither of which are about to attempt such a purchase. It would cost ~$40 billion to buy them today.
- bsder 11y ago> No, it's not a Chinese buyout. You're talking about the acquisition of maybe 2% to 3% of their equity. It's meaningless in that regard. Really? Where did that 2% to 3% of equity number come from. I would be stunned if $1.5 billion is going into the company for just that. Even the valuation numbers seem to indicate at least 6%. And, an even more interesting question is: "Why does airbnb need $1.5 billion if their annual revenue is $900 million?" People can downvote all they want, but did any of you people read the article: "Leading the round are private-equity firm General Atlantic Inc., Chinese firm Hillhouse Capital Group, and alternative-investment firm Tiger Global Management, which are collectively buying about a third of the shares allocated for this funding round, the people said. The deal, advised by Morgan Stanley, includes Singapore’s Temasek Holdings as well as venture-capital firms Kleiner Perkins Caufield & Byers, GGV Capital, China Broadband Capital and Horizon Ventures." That's a hell of a lot of Chinese investors.
- mrgordon 11y agoYes the company is trying to expand internationally and it makes sense to partner with major players in markets that are significant for them. As far as the numbers go: $1.5B / $25.5B = ~5.88% equity Then you figure the Chinese investors got maybe a third or half of that and you get to the 2-3% that someone else arrived at.
- hatred 11y agoI would be greatly interested to know what it means for later employees who had RSU's since this effectively might set back the IPO dates by at least a few number of years. How does this effects them ?
- erichurkman 11y agoThe company could also opt to settle portions of their employees' RSUs for cash if they wanted to offer employees liquidity even in advance of an IPO.
- dthal 11y agoIs there any information to be had anywhere about terms? We hear the valuation shouted from the rooftops, but with nothing about the terms, its hard to know what the big number really means. Specifically, does anybody know if this a common stock purchase, or is this some kind of convertible preferred stock/convertible note with a liquidation preference?
- randall 11y agoNo inside info but I'm almost certain its preferred with a liquidation preference. Probably with downside guarantees.
- pbreit 11y agoAlmost certainly preferred with 1x liquidation preference meaning investors don't make much of a return unless it sells or trades for well in excess of $25b.
- ahmetmsft 11y agoCan we please stop posting articles behind a paywall? I can't read this at all, not even in incognito browser mode.
- lmcnish14 11y agoIf you copy and paste the link into Google, you can find a version you can read without paying for the subscription.
- htmelvis 11y agoIs this Real Life?
- deleted 11y ago[deleted]
- 001sky 11y agoAirbnb $25.5Bn $0.9B revs 28.3x 90% yoy Marriott $20.9Bn $14.8 revs 1.4x 8% yoy
- rokhayakebe 11y agoMarriott: 200,000 employees, 697000 rooms, 4000 locations hence no more than 4000 cities, 80 countries AirBNB: 1600 employees (less than 1% of Marriott's), +1.4M rooms (for which they pay no mortgage or maintenance), 190 countries, 34000 cities.
- venomsnake 11y agoMarriott - legal and obeying regulations. AirBNB - 50 shades of legal gray.
- jonny_eh 11y agoNext week in Paris, hotel owners burning cars?
- doleson 11y agoI'd be really interested to know (we'll have to wait for AirBnb's S-1) what the difference in gross margins. Marriott has to own / operate its hotels. AirBnb puts that on the host, and pretty much only has insurance and customer support as its marginal costs.
- saryant 11y agoI don't know where this trope came from but the big hotel chains most definitely do not own all their properties. They provide brand standards, a common reservations system, customer service and a loyalty program (which can be incredibly lucrative by itself). But they definitely do not own all their hotels. Marriott-owned properties number in the low double-digits.
- mrgordon 11y ago