Airbnb: The Disaster Artist…And 8 to 80 Portfolio Ready at IPO

There are times when I struggle to write anything and there are times like right now, where I could write all day.

It is harder for me when I am in the write all day mode because I have paper everywhere and 20 half written blog posts.

Today, I have settled on Airbnb (ticker symbol $ABNB). They have settled on a price for their IPO which gives them an enteprrise value of $32 billion.

I have used Airbnb but I am not an Airbnb person. I like hotels.

That will not stop me from being an Airbnb shareholder at their IPO.

One of the new people I like reading is Mario Gabriele who asked me to contribute a few paragraphs to an Airbnb research piece he calls S-1 briefings. His Twitter thread on the briefing does a great job of shouting out all the contributors and pieceing a great story together.

I enjoyed doing it because it was a good way to learn a lot very quickly about Airbnb…from its start to its possible future.

Here is Airbnb in 1 Minute:

That Airbnb is here at all is remarkable. Bludgeoned by the coronavirus, the hospitality platform has spent much of 2020 in a state of crisis, raising debt and cutting budgets. In the process, management demonstrated trademark resilience in the face of adversity, artistry amid disaster.

Thirteen years after inception, Airbnb is, like the rest of the world, in flux. Revenue totaled $2.5 billion over the first nine months of 2020, down 32% year-over-year. Operating margins took a hit, too. But with vaccine trials looking promising, better days may be around the corner. Winners of the IPO include Sequoia Capital and Founders Fund.

As for ‘Why Now’ for the IPO:

With IPOs in 2020, the question is less why now? and more, why not? In March, the world looked very different. Second-guessing Airbnb’s survival was at all-time highs, flash-forward to November and its Nasdaq that’s pushing its upper-limits. Given the love-in tech unicorns have received since spring, it would be irresponsible for Airbnb not to take advantage of this window.

Strategically, a public listing will also give Airbnb access to capital at a time it may need it. That may allow the company to snap up or squeeze out stumbling competitors. From an investment standpoint, Airbnb may represent an attractive “hedge,” as enunciated by Box CEO Aaron Levie:

Airbnb IPO is the perfect market hedge. If you believe the vaccine is coming quickly, people want to travel again. If you don’t believe it’s coming quickly, people want to work remotely in different locations longer.

We’ll see if the market sees Airbnb as quite such a no-loss proposition.

Do take the time to read the whole briefing which you can read right here.

I know you will enjoy it and it may help you understand why I consider it an 8-80 company.