
Predicting Airbnb's valuation in 2020 - rgoksor
https://medium.com/@rgoksor/predicting-airbnb-s-valuation-in-2020-f2436b8c8515
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bcg1
Good article, healthy level of skepticism.

Low visibility into how the sausages are made coupled with high incentive to
juice up the 'headline valuation' make for a sketchy situation.

I agree with the conclusion(s). One thing I wonder about is how a company like
this will fair any downturn in 1) easy money injections (no more private
capital to burn) or 2) the general stock market (unfriendly environment for
IPO). Presumably they would only be left with selling the company at a
firesale if they get into trouble as you point out. Five years is a very long
time to project growth, and we haven't had a meaningful downturn in financial
markets since 2008 so it seems unlikely to me that one won't happen before
2020.

"In one sense, what you want in a bull market is a kid who is too young to
know that what he is doing is foolish. You want a kid who will race into a
bubble and leverage it higher and higher. Guys like me not make nearly so much
money because we see what is going on. The kid does not know why he is making
money, which is why he is making money. The rest of are experienced enough or
smart enough to know that this is going to end badly. What you want is a kid
with very little experience and just enough brains to be very dangerous. But
you need to be smart enough to know when to pull out, to save yourself from
his lack of knowledge and experience, and that, of course, can be hard to do.
When things go bad,. you certainly do not want that kid around - and the kid
is probably not going to be around by then anyway."

\-- "Street Smarts: Adventures on the Road and in the Markets", by Jim Rogers,
pg 63

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contingencies
I predict that middleman entities across all verticals will suffer an almost
complete collapse due to enhanced automation of trade, including more complex
cases of trade in services or renting of physicalia that need to be
underscored by community feedback and reputation systems. This will be as true
for Uber as for Airbnb, as true for Amazon (the retail interface only; not the
warehousing or the IaaS) as for Ebay. I am in fact working on this problem. If
anyone's interested in a long term bet and development in this direction, get
in touch.

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educationcto
"Another question is if the market is ready for a $50B+ IPO. The current IPO
record holder, Alibaba, was valued at $25B."

He misunderstood the reference; Alibaba raised $25b in their ipo but was
valued much higher ($231b). There's plenty of room for a company worth 70b to
ipo.

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rgoksor
You're right, I did misread the note -- see updated version. Interestingly,
Alibaba's IPO came at a time of accelerating revenue momentum.

