Read on Twitter
1/ So $ABNB went public today in a hotly anticipated IPO. If I were the company - I’d be PISSED the stock price closed up over 100%. Here is why:
Imagine AirBnB is a house, and for years the owners have cared for it, renovated it, and updated it to make it really attractive.
Imagine AirBnB is a house, and for years the owners have cared for it, renovated it, and updated it to make it really attractive.
2/ Then, realtors start knocking telling you the market is great, they can get you a premium price if you sell the house, and you sign aboard. They take your house, meticulously maintained and updated, and market the hell out of it. Estimates going in were a sale price of $1mm.
3/ To your delight, the interest in the house is huge, and that original $1mm becomes $1.5mm and you finally close the sale of your house for a great $1.6mm. Over 60% on the original estimate! Great deal, thanks realtor!
4/ Then, imagine your surprise when the purchaser of the house, who spends the $1.6mm to take it off your hands, turns around THE SAME DAY you settle, and sells the house to a new buyer for $3.2mm. Would you really have thought your realtor did a good job then?
5/ Now substitute the realtor for the banks that syndicated the IPO, the $1.6mm for the IPO price, and the $3.2mm for the resale price upon close of trading on day one, and you’d be a company that left a TON of $$$ on the table. $ABNB /fin
