Airbnb and the new world order for business
The new economy is getting a big boost today, and it may be a sign of things to come.
Various reports say Airbnb-- the online apartment-sharing company-- is now worth $13 billion dollars, $3 billion greater than it was priced at just six months ago. That would value Airbnb at more than some big hotel chains such as Hyatt (H) and Wyndam (WYN).
Related: The top Airbnb stays for under $500
Airbnb has turned the industry on its head, allowing anyone to convert his or her home into a hotel. And Yahoo Finance Senior Columnist Michael Santoli believes the company’s success means we could be seeing a sea change in the way other businesses operate as well.
“Everything is next if the valuations make any sense at all,” he says. “People are going to think that we can go back to this ‘everybody’s an entrepreneur, everybody can be an artisan and not have to work for some big organization.’ Obviously, we’re in this mode of thinking that there are basically no limits to this model in other industries.”
The news comes as the company considers an employee stock sale to investors. And while Santoli isn’t sure Airbnb is worth that kind of money, he feels the stock sale gives the valuation much more credibility.
“There’s better substance to someone paying cash in an employee stock sale than some venture capitalist who buys a 1% sliver of a company at an imagined valuation,” he adds. “This does get you a little bit closer, maybe, to what people think is the potential of Airbnb.”
Yahoo Finance’s Jeff Macke isn’t convinced. He says the $13 billion figure is just made up, but he concedes there’s a mentality among the big money firms now to gamble on these new economy upstarts in the hope of scoring a big win.
“It seems like an extreme valuation,” he says. “But venture capitalists are in a ‘Prometheus’ mode where they are bringing fire to man and their egos are responding accordingly.”
Yahoo Finance Editor-in-Chief Aaron Task warns investors better be careful. He notes officials are already raising questions about Airbnb possibly running afoul of tax laws and other regulations covering hotels.
“That’s a huge risk,” he says. “Obviously, they are going to have to get past that if they want to go public, which I’m sure people are thinking about for next year.”
