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With the upcoming IPO of Airbnb, here is my short take on the company and why I will be investing in $ABNB.
(SHORT THREAD)
(SHORT THREAD)
1) What they do in essence?
$ABNB is one of the big representatives of the sharing economy, together with $UBER.
They serve as a middle man between a host of a real estate and a renter. They take a fee for offering the place on their marketplace.
$ABNB is one of the big representatives of the sharing economy, together with $UBER.
They serve as a middle man between a host of a real estate and a renter. They take a fee for offering the place on their marketplace.
2) The market
They are one of those companies that you can fairly say has one of the biggest TAMs out there:
They are one of those companies that you can fairly say has one of the biggest TAMs out there:
3) Regulation
If the IPO was 3 years ago, I would find it a bigger risk than I find it today. Yes, it still is a risk, but I see many countries have already adopted regulations that are still allowing $ABNB to operate, just giving them and their hosts some rules to play by.
If the IPO was 3 years ago, I would find it a bigger risk than I find it today. Yes, it still is a risk, but I see many countries have already adopted regulations that are still allowing $ABNB to operate, just giving them and their hosts some rules to play by.
4) Pandemic?
I have almost completely eliminated the year 2020 from my analysis. I believe this is a black swan event for this company and won’t affect its trajectory in the long run.
If anything, $ABNB reassured me they can be profitable and successfully scale down if needed
I have almost completely eliminated the year 2020 from my analysis. I believe this is a black swan event for this company and won’t affect its trajectory in the long run.
If anything, $ABNB reassured me they can be profitable and successfully scale down if needed
6) The moat
The brand!
Barriers to entry. High costs for starting a new platform. Hosts get “hooked” on the platform once they get some good reviews (people don’t want to start over from zero)
The experience. People are looking for a more genuine experience when traveling.
The brand!
Barriers to entry. High costs for starting a new platform. Hosts get “hooked” on the platform once they get some good reviews (people don’t want to start over from zero)
The experience. People are looking for a more genuine experience when traveling.
7) Revenue Growth
Airbnb was growing their top line by 38% in 2018 and 33% in 2019. For comparison, these are numbers for $BKNG for the same period: 2018 revenue growth 14%, 2019 revenue growth 3%.
It is clear $ABNB is growing more than the market and gaining market share.
Airbnb was growing their top line by 38% in 2018 and 33% in 2019. For comparison, these are numbers for $BKNG for the same period: 2018 revenue growth 14%, 2019 revenue growth 3%.
It is clear $ABNB is growing more than the market and gaining market share.
8 ) R&D
$ABNB in 2019 with $4.8B in revenue spend $1B on R&D.
For comparison, $BKNG had $15B in revenue and spent only $0.3B on R&D.
I like companies that are spending on R&D as this is a metric that provides above-market growth for the coming years.
$ABNB in 2019 with $4.8B in revenue spend $1B on R&D.
For comparison, $BKNG had $15B in revenue and spent only $0.3B on R&D.
I like companies that are spending on R&D as this is a metric that provides above-market growth for the coming years.
9) Interesting information
- $ABNB, compared to many other tech companies, does, in fact, do business in China. This is a big plus in terms of market size opportunity.
- So far, $ABNB hosts made a cumulative of more than $110B on their platform.
- $ABNB, compared to many other tech companies, does, in fact, do business in China. This is a big plus in terms of market size opportunity.
- So far, $ABNB hosts made a cumulative of more than $110B on their platform.
10) My decision on the IPO
I will start a position in $ABNB if the market cap when it starts trading is $55 billion or lower.
I will start a position in $ABNB if the market cap when it starts trading is $55 billion or lower.
