Is Airbnb Really Worth $10 Billion?

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March 20 (Bloomberg) -- Bloomberg Contributing Editor Paul Kedrosky comments on Airbnb's $10 billion valuation. He speaks with Emily Chang and Cory Johnson on Bloomberg Television’s “Bloomberg West.” (Source: Bloomberg)

Now from san diego.

What is your take on this fundraising?

I think you will see both.

I am with cory.

This is a pre-ipo rounds.

A bunch of folks want to be on board before air b&b goes public.

I have no doubt that that is the plan.

People are putting a bunch of capital in and they are planning to take it out again in six months.

That is a good trade for them.

We have seen some interesting investment over the last few years.

Things like t. rowe price and fidelity.

Now texas pacific.

This is not really their style.

What do you make of it?

It is not.

It is oddly reminiscent of the stuff we saw in the last bubble.

You had a lot of people who have lots of cash that they want to put to work.

They thought it was a guaranteed return if they put it in pre--ipo.

That idea that we are seeing the same kind of hot money show up, it is worrisome.

I am not troubled by the evaluation.

There is a company -- here is a company that will be larger worldwide.

It is stunning, the growth that they have had in terms of the total revenue worldwide.

It is remarkable numbers that they are posting.

They are absolutely trashing their competitors.

You have a too-for going on here.

Let's talk about home away.

Air b&b is value that more than some of these major hotel chains.

We have not seen any of the financials.

How do we know for sure that it is really worth $10 billion?

You don't. we have been offered an opportunity to invest.

We do not have to make that call.

With respect to the size, and the total number of transactions they're doing, those numbers are the kind of numbers you would you from a global chain on par with hilton.

The nice thing about air b&b at home away is that they democratize home rentals.

You rent whenever you get on the way.

I get to earn a little yield on my condo in san francisco or wherever.

That opens up the market.

That's not to be a skeptic, but his idea of evaluation compared with hotel when the hotel has hard assets, is an interesting one.

You can flip it around and say that one of the great attributes of air b&b is that they do not have to deal with the same sort of things.

Glad they will never have to repaint the rooms.

You will never have people say, i want to stay on the floor that was just renovated.

That never exist.

It changes their senses.

I know we talk about a bubble . $19 billion.

They do not make any money.


Do you see any trends that are worrisome when you talk about the amount of capital that is out there chasing these cap companies -- technology companies?

For sure.

I see it in other sectors where it is less obvious to me how they will earn a return.

I do not seen the same problems at air b&b that i wouldn't many other companies.

I am more troubled by the stuff i see happening with the internet of things.

We see people funding deals at very expensive valuations.

They are ignoring the fundamental problem that they are just moving atoms around.

There is a lot more fraud on that side -- froth on that side.

You are tying -- trying to earn a return on this kind of business.

What about the regulatory issues?

Air b&b has had major legal challenges.

Huber has challenges all over the world.

What happened in seattle where they are limiting the number of drivers on the road.

Had we known that regulators are ultimately going to give us your -- did?

I do not think we know that.

We know that a politician will gravitate toward that first.

Over time, and whether it is three months or three years, marketing is inevitably opening up.

Whether it is the market of car rentals, or the availability of air b&b housing rentals.

There is a force at this point.

There'll be too much pressure from people to make it happen.

I also wonder about the business.

It is taking away a very profitable area with minimal revenues.

I wonder air b&b have a similar deal.

It is not that they are competing with the hotel business, but they are even reading it.

-- eviscerating it.

One of my favorite pages from start up is somebody who can take an existing tenant and our business -- $10 billion business and turn into a $100 billion one.

The competitor cannot compete.

Paul kedrosky, thank you.

We will continue to fall air b&b

This text has been automatically generated. It may not be 100% accurate.


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