The market is in full bull market mode. There's a lot to suggest this, including the amount of money SPACs have made. Multiple expansion is also a major talking point and I will get to that further on in this post. But one thing is also very, very true. And that is the rise of stocks, like Airbnb, that are signaling market moments rarely seen in history.
Airbnb's market cap is nearing $100 billion.
Airbnb's CEO recently was on Bloomberg essentially saying how speechless he was at the valuation of Airbnb, especially when you consider he had a debt financing round at the start of the crisis at a *much* lower valuation.
The money is flowing. The bull market is back. Asset light companies are rising. Platform stocks are booming.
Airbnb is a fantastic company. But even I am baffled at the $100 billion valuation. Especially on about $4 billion in revenue. This should make any investor or trader think.
For me, it means one thing: how much higher can we realistically go? There are tech companies currently trading at 50x sales and 100x earnings. The multiple expansion is remarkable. And so far there's no sign of it slowing down. Deep down, however, I think we all know there is a point, and there always is, where the return of your money becomes more important than the return on your money.
I have no position in Airbnb, but am using it as a barometer for the market! Have a great week everyone and thanks for reading.
TL;DR Airbnb at $100 billion is a remarkable thing. What does it say about market sentiment in general?
@OffbeatOperator@scheplick, a better comparison is BKNG CTRP and EXPE, they have the asset light nature + profitability of those companies with the service and selection of a hotel chain
cyberluck
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@OffbeatOperator, watch it tank just as fast when the time comes.
GJMRealEstate
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Just like Tesla, Airbnb has a unique set of data that no one else has and it is offering a unique product that the hotel chains can't offer. On top of that they don't even hold any real estate or the expenses that come with that.
And when I travel I like to stay at AirBnb no matter where in the world so I can support a local person, instead of fattening up the CEO of boxchainhotel.com
cyberluck
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@GJMRealEstate, sure but they got hit hard, laid off 1900 people, some states regulated them to shut down or not allow certain number of people to rent plus owners got hit with extra taxes...Airbnb business gets affected by rental regulations so as much as I love airbnb...I think jumping on it for a long term ride right now might be too soon as it's way overpriced. Short term you might make a buck but everyone now thinks they are investors and traders because we're on the left of the wave pattern..wait when we start correcting soon then try to trade and make ...hahaha
GJMRealEstate
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@cyberluck, I know all about the challenges for AirBnb and the hosts. I am an AirBnb host in Fort Lauderdale with three properties on the platform.
Something to consider is that still,.. no one is decent competition for AirBnb. They keep innovating the tools to help hosts earn more and manage better. I have used other platforms. They suck. I just focus on AirBnb.
Also AirBnb is building their own hotel style properties. One here in Miami is sold out. I look forward to purchasing a few units in these buildings and letting AirBnb manage, and book them, and I just collect the income. The management rates are more attractive than Marriott managed condo-hotels in the area.
Technology will likely pull down higher and higher multiples going forward and the money printing only supports this.
Anyhoo I am sure there will be pullbacks to the AirBnb price and some good trades. I am long term only.