 Airbnb files for its IPO. What does it mean to investors? What does that look like? Will you be investing in things like that? We're going to do so much more on this episode. We're going to talk about not only Airbnb filing for its IPO, we're going to take a look at what they're filing, who are their competitors, and will it be a good investment for investors or whatnot? So I won't say would it be a good investor, but would it be a smart investment financially for investors or not? So the first thing out there, ladies and gentlemen, I would like guys and girls to understand what is Airbnb? So for a lot of people out there who don't know what Airbnb is, Airbnb is pretty much a new age. How would I put it? It's kind of like the Uber of the hotel and travel industry. Usually when we go to book a hotel or whatnot, we fly, we buy, we may be going to used to use a travel agency back in the day. Now we use the internet to book a hotel. Some people may book a big hotel, whatever the case may be. But now people have the ability to be able to rent their house out for a week, a day, a month, a year, or for a vacation. Now instead of going to houses, people can now go to, instead of going to hotels, people can now go to other people's houses. For prime example, take me, take my dad. Let's say my dad passed away and left me his house and I have this big house that I don't want to sell anything like that. I can actually rent that house out during certain seasons. Maybe it may be a big season down where I'm from, Waynesboro, Georgia, just right near Augusta, Georgia, and I can rent it out for the masters. So for the masters for that one week, people can rent out my house or people was passing through, I can rent out my house for the weekend, a week, a day, whatever the case can be. Some people just do Airbnb where they just rent out their houses. Even further with Airbnb, I've seen it where people just rent out their rooms. Some people rent out their rooms. So pretty much it's taking the hotel world by storm. Airbnb is just a online company that facilitates supply and demand of real estate or whatnot, just like Uber. Uber doesn't own any taxes. Uber doesn't own any taxis, but it doesn't own any cars. But guess what? It has the largest taxi service in the world. It's the same thing what Airbnb is doing. Airbnb, it is becoming the largest hotel chain in the world, but it owns no hotel. Kind of crazy how time works. So it's almost like social media. Facebook is becoming the largest media outlet, but it owns no media outlets. We all contribute our content to it to make it great, right? So the thing about it is Airbnb, it is different. It is changing the way that we do things. We all heard of it. For prime example, why is it so big? Because people, when they travel, they no longer have to worry about, hey, I have to stay at the Marriott or I have to stay at the Hilton. Now I can just grab someone's house or I can grab someone's room or whatever. And it's a whole lot cheaper than purchasing a hotel room, worrying about hotel prices, things like that or whatnot. And also it's good for people who own regular houses. They can take their regular house and turn it into a hotel. The same exact concept is Uber. People take Ubers because they're cheaper and more convenient and people drive Uber because it's easier to get into. So pretty much, I hate to use this word, I know it's not a word, but pretty much Airbnb is Uberizing the hotel and travel industry. Now with that being said, it is filing this IPO. What is the IPO, Prince? This is an initial public offering. This means that right now, Airbnb is a private company, meaning you have to know somebody, you have to be friends with somebody, all the other great stuff or whatnot or whatever the case may be, or you have to be an executive of the company in order to be an investor, or you have to be an accredited investor, meaning that you must have, as a single person, you must over the last two or three years, you have earned over $200,000 in income and have a million dollars in a network, not including your primary residence. With that being said, for the everyday person, you don't have an opportunity to invest in Airbnb until it becomes to the public. Once it becomes to the public, it's fair game. Anybody can invest in it. Anybody that has an E-Trade, a TD Ameritrade, a Charles Squab, someone who has an investment manager or whatever, you can text your investment portfolio manager says, hey, I want Airbnb. That's what an initial public offering is. This is their initial public offering the first time coming to the public, and you will probably see them on a NASDAQ or ringing the bell. It'll probably be a big thing when they finally go public. Very good accomplishment for a company to go public. Very good for the people that's already in. Now, this is my belief when they go public. I think that Airbnb has a great name. It's revolutionizing the game, but I think it's going to fall to fate to all big name, buzzword, Airbnb, but big name companies that go public. For prime example, we've seen this with Uber. We've seen this with Lyft. We've seen this with very big companies that go on public, and everybody just wants a piece of it. Everybody will rush in and rush the price up. For prime example, it will come out before they go public. Airbnb will be $50. I'm hypothetically speaking. Please don't quote me on that. It will say, hey, it'll be $50. Today it goes public. It goes public. The price is going to run up so high. It's probably going to run up to 80 bucks. Everybody's going to get excited about it. Oh, Airbnb. Oh, it's so great or whatnot. But I guarantee you 98% of the general public has not read the S1 report. The S1 report is the report that is available right now that would tell you about Airbnb. Who are the competitors to Airbnb? Who's the number one competitor to Airbnb? Does Airbnb make money? Does Airbnb competitor make money? How much money do they make? Why is this so important? Because it's a great gauge of where I would think you would be. So Airbnb, if you read the S1 report, every financial report, especially the 10K report, it will tell you who is the number one competitor? Who are my number one competitors? So you take for a prime example, Airbnb, they said that number one competitor are OTA, something they call OTAs that might be an official name. It's online travel agencies. Their number one, a number one online travel agency is Booking Holdings. Booking Holdings. Who's heard of Price Line? Have you heard of Price Line? That is the old name for Booking Holdings. So Booking Holdings, it was previously known as PriceLine.com that was PriceLine.com that is now Booking.com. It is the number one competitor that you will see against Airbnb. Now you have to ask yourself this question. What is Bookings.com? How much money do they make? What is their market cap? So why is this so important? Why would you care? Because this gives me a great indication of how the company that I'm looking to invest into, that you're probably going to invest into, how would it fare up? If the number one person in your industry is not making money, I will shy away from that company. For prime example, let's say a new company came out called Ride, Food Ride. And Food Ride is pretty much going to do what DoorDash is doing. It's going to do what Postmates and Uber Eats is doing, things like that. I wouldn't be very interested in investing into them because I know the biggest name in the brand and the biggest name in that sector is Uber. Uber is not profitable yet. If Uber is not profitable, what makes me think this little company will get to profitability? The likelihood? Probably not. So if the big boy in your industry is not making money, how will you make money? Unless you've got some new type of ways, some new type of technology that I don't know about or whatever the case can be or whatever? Because this is a big thing about when you have a small company that comes in with new technology. A small company that comes in with new technology, what do you think the big company is probably going to do or should be doing? The big company is going to take that same technology, that same business model, and they're going to apply it to their already big base. And if you follow the S1 report, Airbnb will tell you that. For prime example, whatstopinpriceline.com, a booking.com, from taking what Airbnb is doing and pretty much put it on their platform. They already have a competitive advantage because they're that much bigger than them already. So this is very important because people like to look at companies and people like to look at companies and say, hey, well, I know this company. I'm very familiar with it or whatever. But for me, if I was going to invest into Airbnb, I would take Airbnb and I would take booking.com and I would compare them. Who's making the most money? Who's doing the best things or whatnot? What is their market cap? How much money is booking.com making? What is Airbnb doing different from booking.com? What is the difference between the business model? Because if I can't understand it then and I really wanted to become an investor, I would look to becoming an investor in booking.com over Airbnb if I did not understand the business model. I know Airbnb is new, is fresh or whatever the case may be, but it's walking into a space where someone already exists, where juggernauts already exist. Now let's take a look a little bit deeper here into Airbnb. Let's look at their finances. So when you look at the finances of Airbnb, why is this so important? Their finances is so important because it's simple concept of I have to ask the question, do you make money? If you do make money, how much money do you make? If you don't make money, why would I invest into you? So right here, this is the biggest competition, booking.com, booking.com, I think this price line.com, Expedia, Expedia.com, HomeAway, Hotels.com, Orvids.com, Travelocity, Trip.com, Trip.com, it's a number of them, it's another name that I can't even hear really figured out. Well, I can't not figure out what announce, announce city names or whatever the case can be. Now we have also the big competitors are search engines like Google, travel search products, so in regional search engines. So why is Google search engine a competitor to Airbnb? They look at that as a competitor Airbnb, because let's say if I'm traveling to New York City, and I want to get an Airbnb instead of a hotel, the number one search engine in the world is Google, I type into Google, can I see an Airbnb pop up? So they look at that as a issue, right? Do you have Chinese short-term rental competitors? You have online platforms offering experiences, kayak.com, KKday.com, our competitors are, this is what they're saying, our competitors are adopting aspects of our business model, which could affect our ability to stand out in the marketplace from our competitors. Increased competition can reduce our demand of our platform, our host and our guests slow our growth and materially adverse our business, right? Many of our potential competitors enjoy substantial competition competition advantage. Some of them have bigger names, some of them have bigger brand recognition, some of them have a longer operating history, larger marketing budgets and loyalty programs, as we substantially are greater financial, they have greater financial assets, technical tools and resources. Now, this is what Airbnb is saying to its investors, its competition, right? They're saying, hey, we have competition, this is a risk to us, right? Also, they're saying we are subject to a wide variety of complex solving and sometimes inconsistencies and bigger laws and regulations that may adversely impact our operation. This is what we call political risk. A company just experienced, we learned a great lesson about political risk was Uber. Who remembers Uber back in California? Remember Uber in California? I think that was Proposition 22, Proposition 22, pretty much when in California was going to destroy Uber and Lyft as we knew them. But guess what? The people voted no, because what they want to do with Uber and Lyft, the government said, no, you must not have Uber drivers listed as contractors, you must list them as employers. California, if Uber had to list those people as, had to list drivers as employees, it would erect a whole business model. That was the political risk they had, but they was able to defeat that. And since then, the stock has gone on a nice tear, right? So they're sending, hey, laws, depending on what type of laws can happen that can slow down Airbnb's growth, right? So another thing they put in here, we're subject to regulatory inquiries, litigations, disputes, they can be sued. That's any company in every company. You know, I'm pretty sure they've had plenty of lawsuits already. We could face liability information for contents, accessibility through platforms. They could be, you know, their platform could break down and not really worry about the legal side of the house. Home sharing may not achieve global acceptance. So here's another risk they say, home sharing may not achieve global acceptance. While home sharing has grown in popularity, home sharing may not achieve global acceptance, particularly in regions where home sharing may not be being attractive to host and guests due to culture considerations. The attractiveness of our platform for host and guests is impacted by the number of factors, including the willingness of individual hosts to offer their homes on our platform in the willingness of guests to book stays at homes in lieu of more traditional options, such as hotels or our ability to continue to extend operating models intentionally and offer localized services that are desirable to our hosts and guests and our ability to offer cost-effectiveness alternative to traditional accommodations. That's just a big word of saying that people, this may not be, this may not become a popular thing. Everybody may not want to Airbnb their home. Also on the reverse side, as a homeowner, I may not want to Airbnb my home. I think people may tear up my home, tear up my things or whatever. On the reverse side, people may not be comfortable with Airbnb, Airbnb, a guest. Like for a prime example, some people may choose to just stay in a hotel. Hey, I just want to stay in a hotel. I want to stay on a resort. I don't want to do Airbnb. So it has to be accepted by two sides. You have to have a host and you also have to have a guest. So you have to have a host and you also have to have a guest. So what we're going to do here, we're going to take a quick break and after this break, we're going to get furthermore into some of the risk factors with Airbnb going public that most people don't tell you about. So we're going to take a quick break and we're going to be right back with more of the IPO of Airbnb. And we're back here live on the Prince of Investment, Prince Dice, coming to you guys and girls live all the way from a beautiful city and state of Denver, Colorado via Hollywood, Hawaii. Now before the break, we talked about the IPO of Airbnb, the initial public offering of Airbnb. So this is the first time I'm going to the public. We talked about Airbnb, some of his weaknesses. We talked about what was the IPO, what was the strategy, the competition to Airbnb. And now we're going to get into some of the strengths for the rest of the show of Airbnb. Now here's some of the strengths. When I look at Airbnb and I look at some of the weaknesses, you know what always rings in the back of my head? It's Uber. Uber is directly, is a cousin or sister or brother of Airbnb. Why? When you look at all of the weaknesses of Airbnb, they're the same weaknesses that we've already seen Uber go through. The first thing is some people just don't, the global acceptance of Airbnb. Some people don't like the idea of riding in someone else's car. They feel as dangerous. It's not culturally acceptable. The second thing with Airbnb is criminal, not criminal, Airbnb, Uber, criminal, right? You have, oh, how many people have heard stories of the Airbnb Uber driver shooting somebody, somebody shooting an Uber driver, somebody, you know, robbing an Uber driver or somebody having a wreck in an Uber car. All types of stories that we hear when we hear about Uber and we hear about the things that they're doing, right? Then you hear, then you've seen the political aspect that Uber had to go through. Uber just beat Proposition 22 out of California. When you read the, the weaknesses of Airbnb, they're the exact same thing that you already seen with Uber. So, and when you look at their business model, it's just pretty much Airbnb is doing what Uber did to taxi cab businesses. Uber is just pretty much a platform that offers one people rides and it offers people to give rides. That's it. We look at Airbnb is doing the exact same thing. It has a host and it has a guest. People are offering up their house and the guests are taking their house. That's it, right? So Airbnb and you have Airbnb and you have Uber, you can see the similarities to them big time, right? The big difference between Airbnb and Uber. The reason why I'm a bit advocate of Uber so far is because Uber is the only one in this sector, meaning that when you look at, you know, nowadays, nobody who's catching tax gaps, not that many people mean. So Uber is number one in this space. You have Uber, you've got Lyft, you've got DoorDash, you have other companies out there that's doing, but the big boys of Uber, Lyft, pretty much is Uber and Lyft. Uber is number one and it's the only one that's over there. It's over there by itself. Uber and Lyft, they're in their own little, I think they call that the gig economy where people just do gigs for money real quick. So that's in the gig economy. It's an economy by itself. Airbnb is different to the fact that it is not going into a sector by itself like Uber did. Airbnb is going into a sector like that's already there. They're just trying to revolutionize it. For prime example, we still have Marriots all over the country. We still have Hilton Hotels all over the country. Days in. We still have Travelocity. We still have Expedia. We still have online travel agencies all over the country. We have online travel agencies. We have all type of things across the country already, right? So when you look at Airbnb, even though it is the cousin to Uber, it's going to have a more uphill battle to dominated space. Uber is dominating the gig economy. Uber has three ways it's making money. It's making money from travel. It's making money from giving people rides, also delivering food, also freight. Those are three big ways it makes money. Versus Airbnb, when you look at it, it's going into an economy that's already established. They're just trying to revolutionize it. Travelocity is already there. Booking.com is already there. AKA, Priceline is already there. So what they're looking to do is to revolutionize what's already there, which is a bigger feat than what Uber is doing. Because easily, Priceline.com, Booking.com, Hotels.com, could easily stretch their head and say, let's do exactly what Airbnb is doing. They can take the exact same business amount that Airbnb is doing and market it to the millions of users they already have. Booking.com can already say, hey, look, now you can post your house, not only on Airbnb, you can post it on Booking.com. And you're crazy to think that's not going to happen. So Airbnb has a bigger fight upon its hands. So let's go to some of its strengths. Okay, right here is our core strengths. We have six core strengths that help Airbnb create a new category and gives us a competitive advantage. One, unique host community. The more than 4 million hosts in our community are unique as their homes are in experiences they have shared. We have the majority of our 5.6 million active listening only available on Airbnb. Number two, engage guest community. So they're saying that they have hosts. Hosts are the people who are giving up their land or their house or whatever to be used or to be rented out. The other side, engage host community. Our hosts have welcomed hundreds of millions of guests arrived through Airbnb. Our guests come directly to our platform, actively participate in our community and return regularly to Book Again. So they're saying, hey, we already have users, we already have guests and we already have hosts. Another thing is a global recognized brand. Our brand is recognized globally and Airbnb is used as a noun and verb in countries all over the world. For example, Uber. Uber has done the same thing. This is the Uber of rental properties. So Airbnb is saying where the Airbnb is becoming a noun and verb, they have a nice brand recognition. Number four, global network. Hosts and guests attract each other to Airbnb, creating a global network across more than 220 countries or regions. They have a global network. Okay. Number five, custom built platform. Our technology platform was built for the unique needs of our hosts and guests. It allows us to quickly adapt to what our hosts and guests around the world require and delivers deep business intelligence insight to help manage our marketplace. So they have their own marketplace. Number six, design driven approach. Since the beginning, design has been at the core of everything we do and we enable us to create a new category. So right now they're saying, hey, we already have a bunch of hosts, we have a bunch of guests that are at 220 countries around the globe that we're using each other's and things like that. That's great what you're doing. I want to know what your long-term strategy is. That's what they're going to speak about now. Our strategy is to continue to invest in our key strengths. Number one, unlock more hosting. So they want to create more people to put their hosts online. In order to have enough selections for our guest bookings on our platform, we will continue to invest and growing the size of quality of our host community. We believe that we have just stretched the surface of the opportunities that a hosting can provide. So they look to get more hosts in the future. That's how they look at... This is where the bread and butter for an investor. I don't care about what you did already. You're already a global brand. You already got a host and guest. What are you going to do in the future? So they're saying they're going to look to get more hosts. Number two, grow and engage our guest community. We intend to attract new guests to Airbnb and convert more of them to our brand advocates. We will continue to focus on engaging our existing customers to return to book to us to Airbnb more frequently. So they want the host to use more. Number three, invest in our brand. We intend to invest more deeply in our brand to educate new hosts and guests on the benefits of Airbnb and the uniqueness of our offering. Okay. Number five, expand our global network. We plan to expand our global network in countries in which we already have deep presence as well as to expand into new marketplaces where our penetration is lower, such as India, China, Latin America, South Asia, and tens of thousands of similar marketplaces to remote areas around the globe, around the world. They want to innovate their platform. We will innovate and to improve our guests and host experiences on Airbnb. Now, designing new products. Okay. So right now, they're getting beat down because of COVID-19. COVID-19 came through and shocked a lot of people, but it helped out a lot of people. So that's where you have it right here, ladies and gentlemen. We talked about Airbnb. Of course, are they making money? No. We looked at their strengths. We looked at their long term strategy. We looked at their competition. We looked at their ability to be able to walk into a new marketplace and to be able to dominate, not dominate, but to be able to get to the top of a new marketplace, which is at the top of the hill right now, is booking.com, priceline.com, aka priceline.com, which is booking.com now, is at the top of the food chain when it comes down to a hotel, accommodation, and whatnot. So that's what priceline.com does. It goes in, people book hotels, priceline.com doesn't own hotels and things like that, that I know of, but it's a marketplace for you to go to and to book air. They do airplanes, hotels, travels, all that good stuff. So they're trying to get to that marketplace and to put people houses to grow more hosts and guests into their community. So they're trying to uberize people's the hotel industry, right? So will they be able to do this successfully? I don't know. This is something I won't be buying immediately as it comes out. I will wait to see how it performs, to see its finances, to see how it can deliver on its long-term strategy. Because they have a very big hill to climb up because you already have people like hotel.com, priceline.com, kayyepikayak.com, and so many websites, Expedia that's already over there, Travelocity, Orbitz, these companies are already doing that. And they are taking some of Airbnb's technology and they're expanding. So can Airbnb get in there and dominate? It's more riskier than a lot of people believe it is. So anyway ladies and gentlemen, that is my take on Airbnb and also the IPO that it's looking to do here. I think by the end of the year or sometime in 2021. Hope you guys and girls invest wisely. I read this information directly off of the S1A report off of scc.gov. I hope you find this very helpful to you. And as always, don't forget to hit that like, subscribe, comment, hit the share button, hit some comments. Let me know what you think. Will you be buying Airbnb? All the other good things like that. Share this with your friends, family, cousin, if you got something out of it. But until the next video, podcast, cartoon, or whatever else crazy you see me do around the globe, my name is Prince Dax. This is The Prince of Investment. Peace, be safe, I'm out, and thank you.