Why’s Airbnb the first to be profitable yet probably the last to go public?Mar 10
What’s up with airbnb? Companies like uber, lyft are going public with huge losses.
- Amazon JWdr84Most importantly, they don't need the cash. But it lets them do things their way without public finance metrics affecting employee net worth and thus morale if things don't go as well as they hope.
- Lyft swetoolThe business doesn’t need the cash but the stakeholders of the business certainly do. So far no one’s offered an explanation
- Amazon JWdr84If Airbnb hasn't been pressured by investors to IPO sooner rather than later, then I suspect it has something to do with their obsession with building a great company culture. They probably have their investors convinced that it's in the best long-term financial interest of the company to continue to build their culture so that the employees don't leave at the first chance they get some liquidity.Mar 105
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- Most likely we will go ipo by end of 2019. Would definitely go ipo before mid 2020.
Reason why not yet - only big shots know but here is my understanding :
1. We don’t need cash as we are already profitable.
2. We want to generate more revenue streams before we go ipo.
3. We want to try out different business and see what else sticks. It’s harder to try new risky things after you go ipo as you cannot freely spend without making investors nervous.
4. Investors are patient and not being pushy as they have confidence in founders.
5. Employees were not that patient as investors . So last year company started giving huge bonuses to us. Like at L6, I am getting 25%. This is to help employees have more money in hands . Also company gave us option to receive up to 25% of refreshers in cash so that we have more in hand money without going ipo. So now employees are patient too.
- Yes, so if all major shareholders are patient, and they think company value will increase a lot without needing extra IPO money, they will delay that long.
But what if long term prospects are not fully known? And some big investors start getting impatient?
I'm just answering the qn of why a company might do ipo even if they are profitable.
Yet another reason is, if they think they can use the IPO money to expand exponentially, then they would ipo7d0
- To IPO you don't need profit, you need growth. Airbnb is not growing.. since Priceline and Expedia are competing very efficiently and local governments at kicking their ass