Hey hey youtube what's going on it's Richard found of short-term rental
University and if you're new to the channel let me just introduce myself I'm
a professional real estate developer and in my prior life I worked on Wall Street
where I ran a 4.5 billion dollar hedge fund I believe short-term rentals done
properly are the single best investment opportunity I've seen in my entire
investment career so if that sounds good and you want to learn how to do this
yourself for your financial freedom go ahead and subscribe to the channel now
and like the video and you'll be updated with future tips suggestions and advice
on how to monetize this once-in-a-lifetime opportunity today's
topic is the forthcoming IPO many of us know Airbnb is going to go public in
2020 and the reason that it will occur in 2020 almost irrespective of anything
else that's happening in Airbnb --zz business or the economy or anything else
is that when they created their employment contracts and their options
that they gave top senior employees in their firm many of these options expire
in 2020 and they can't allow that to happen they need the employees that have
helped build this platform to be rewarded and be financially secure and
so on and so forth so they can't allow these things to expire I suppose there
probably is some legal way that they could extend it but they don't want to
do that and the employees don't want that either
they really want the liquidity event they want to get paid for what they've
helped accomplish and build and rightfully so and so the question is as
a professional investor would I be investing in Airbnb on the initial
public offering and I'm gonna save you that like watching the whole video if
you're not interested the short answer is no I imagine that this might be
shocking to you right I mean I'm a huge Airbnb advocate it's the single best
opportunity I've seen in my investment career to invest in the short term
rental space and Airbnb is the fastest growing platform and so why would I not
invest why would I not own equity in Airbnb the company that's facilitated
this and created financial freedom for the tens of thousands of viewers and
followers and the people in the Facebook group and the answer for me is pretty
straightforward I generally don't like taking professional investors out of
their positions and being like the dope on the retail side right so what does
that mean exactly well the people that have invested in Airbnb while it's a
private company are some of the smartest
brightest people different private equity funds venture capital firms
friends and family these are like what's known as smart money they have more
information about the company earlier their returns are huge and outsized and
so the way that I tend to look at the world is if I'm buying who's selling and
why are they selling and if they're selling because they believe Airbnb is
at the fair market value it's worth thirty five billion dollars or forty
billion dollars and they believe that it can go up to say forty five billion and
they're exiting well what do I know differently than they do and the answer
is nothing I have much less information than they do they have all the
information I have none of the information if they're selling then
who's buying and so generally speaking I don't like initial public offerings
because it's a liquidity event for the smart money and what they're looking to
do is to exit and not necessarily grow that business from where it is 10x and a
second reason that I don't particularly like it is there's been a really big
change in the IPO market overall where companies used to go public earlier
because they needed the money and so you would have companies like Amazon and
other companies go public when they were worth a small fraction of what companies
today companies today are these unicorns and they go public at thirty billion
valuation forty billion valuation fifty billion valuation and the question is
what's the likelihood that there's going to be say a five X or a ten X so if
Airbnb goes public at thirty five billion dollars is there a 10x off the
IPO is it going to be worth three hundred and fifty billion and the answer
is I don't think so but that's the way you used to get compensated for an IPO
it would go public and say three billion and it would be worth 30 billion 10x and
so the public investors like you and I we could participate in that 10x but
that 10x has already happened it's for the smart money they've participated all
along they're exiting after the 10x and selling to people like you and I and I'm
not saying that I will never invest in on IPOs or an air B&B but my first
glance at this and I don't have a lot of the details yet it's not made public is
to just sort of wait and see I don't need to be there
there's no real massive opportunity for being there day one and so consequently
I'll just take a pause watch reevaluate learn more and follow along when Google
went public it was very similar to what I predict will happen with Airbnb I
believe Airbnb will go public via a direct offering and skipping all of the
investment managers and all of the different brokerage firms I charge all
these fees I think they will go direct to the public like Google did via a
Dutch auction you know a decade plus ago and during that period of time even
though I was an avid Google user and I believed in Google I didn't understand
how they would monetize or how they would grow and so I passed on the IPO
big mistake right well not really after the IPO I continued to follow Google and
use Google and watch the rate of growth and the adoption rate and how much more
superior their technology was to Yahoo which is what I was using at the time
and I bought Google in the open market after the IPO maybe three to six months
after the IPO and I've generated about 10x since then so I didn't buy it on the
day of the IPO I watched but I bought it after and I participated in the massive
gain but again when Google went public it was a different world they didn't
wait to go public until they were already worth tens of billions or
hundreds of billions of dollars it was a smaller company and so the IPO
attractiveness on a relative scale was more interesting and appealing to me
then then buying a forty billion dollar company like uber or lyft or Airbnb or
we work that fail so I'm not particularly interested in not knowing a
lot about the company today supporting the private valuation giving the smart
money their gains and their profits and giving them the money back and me
holding the bag right now at this higher elevated level that's really lofty and
I'm not sure is really worthwhile so for me personally I'll just pause pass
reflect and try and determine whether it's a good investment once I have more
data more facts and it's less about the emotion of like this has been a really
good platform for me and I want to participate this is now a new
independent decision a variable that I haven't contemplated before would I like
to own equity and Airbnb theoretically yes but at the
right valuation not at the wrong valuation and so personally and I'm not
making this decision for you you should use your own analysis but for me
personally I'll pause and I'll wait there's no rush another consideration
that enters my analysis is sort of the state of the economy and where we are in
the stock market and we're at all-time highs and we're in the longest bull
market we've ever seen and this time is not different that's one of the biggest
mistakes that the individual investor or the retail investor makes in anything is
that this time is different well let me tell you firsthand having
lived through 1987 crash 2002 2008 and now like this time is not different
there will always be returns to the mean there's constantly periods of
overvaluation and then correction and so if we've gone straight up for the last
10 11 years and it's the longest bull market in history
we're long in the tooth we're late in the economic cycle and you know what
like I'm a better seller in that environment than I am a buyer so just
from a purely economic perspective and where we are in the investment cycle
this is not a place where I am reaching and investing in risky IPO type
investments lately in cycle I'm actually being much more conservative and
concerned and keeping powder dry because I know this time is not different there
will in fact be a better opportunity to enter later and I can't tell you with
any certainty whether that's tomorrow or next year or in ten years but I do know
that when we're in the longest bull market we've ever seen and valuations
are at the highest levels we've ever seen and everything is priced to
perfection my radar goes off and says start to
bring risk appetite down ratchet down not push harder go for more hope this
continues believe this time is different those are rookie mistakes and I don't
want you to make them so whatever you think about the IPO I'd love to hear
your comment below have you invested in other IPOs will you invest in the Airbnb
IPO please share with us your thoughts because again it's all about the
community and one mind here is good but two is better and two hundreds even
better two thousand twenty thousand etc so share below like the video and please
subscribe to the channel thank you