Martin Shkreli Analyse Airbnb Stock (Full Excel Valuation)

uh you generally do not get paid for going on TV you can't really get paid and have it be partial impartial all right so Airbnb is clocking in 2.8 billion in Revenue last quarter and that's up a lot but we have to look at the co experience they're probably the most one of the most impacted Co right uh do I put operations and support in cogs I think you have to I think so I think so you can see it's a very profitable company so it's it's kind of like an Uber business model but better they're like what Uber wants to let me see something here for [Music] [Music] all right so like a billion and operating income a year or quarter interesting again this is my first exposure to Airbnb at least the business um so I have a million thoughts racing in my head and I'm trying to suppress all of them because you have to be really careful when you form these judgments and not anchor off of like the wrong uh perspective what's up Ryan [Music] okay somebody asked a rather silly question about using chat GPT to write Excel files well chat GPT can't export into Excel or do anything like that it's also time limited on its data it's data it's most recent data is a year and a half or two years old so it's not a very robust system I program with chat GPT every day so uh released programs on GitHub uh using chat GPT API I'd say I'm probably a fairly good customer of chat gpt's API or open ai's API so you know don't don't try to give me advice on on uh financial information systems that's that's probably not something that anybody is really equipped to do you can ask me questions don't don't even think about giving me advice going to make me mad mad don't don't even think about it I don't think Steph Johnson syndrome's really something that happens too often it happens with every drug maol is not uh I think that exceptional and uh I wouldn't take mfol once you're really needed it I mean most people don't need mapol unless you have narcolepsy or something like that what do you need mapol for it's uh not a drug you you should be playing with because you want to be you want to have a quote unquote new Tropic or something like that and people that do [ __ ] like that are idiots you're either smart or you're not you can't take some pills to get smart you know if you're smart you should be happy use your god-given talent and leave it alone the worst that I do is drink a couple cups of coffee and I got to quit that it's make give me anxiety again bad dreams uh I wouldn't take any any medicine if you think that some medicine is going to make you smarter or study better or something like that let's you have true radi HD I wouldn't do it and it certainly won't give you good long-term performance they did a good study of caffeine versus uh mapel versus ADHD medicines uh for chess players which is a fairly cognitive uh pretty cognitive tool and it uh didn't work mm's law says there's no such thing as depression that's not true my friend that is definitively not true there depression is a very real thing now what we understand depression is is is uh something that is hard to to for us to get our you know necessarily get our heads around we probably will call it something different 50 years from now um but I I do I do think uh it's pretty obvious there's a depression phenotype you guys want to play chess I want to play chess too so bad but the Market's opening in a minute I have to get some of some systems ready for that um let me power up one of them now I get depressed all the time I've suffered with depression my whole life on and off some periods are better than others I've gone years without depression and then sometimes I'll have mild depression for many years sometimes I'll have a period of time where I'll have kind of a major depressive episode um so you know it's something that the average American will eventually struggle with at some point in their life [Music] um it's fairly common in that that respect dysemia yeah kind of a milder form of depression let's see here got to jump into AWS real quick don't mind me maybe play one quick chess game cuz I'm addicted I'm trying to get to 2000 ELO and liess or Le chess uh yeah snris are a little bit better than ssris but they're pretty similar um you know if you have a psychiatrist that's seen thousands of patients they're usually be pretty good at at figuring out what's wrong with you I'm very lucky I have very very good psychi psychiatrist the first psychiatrist I ever saw has been my lifelong psychologist psychiatrist and I I think the guy basically saved my life depression and anxiety especially I panic disorder can be really really debilitating um and yeah I try to talk about it and help normalize it a little bit uh especially for executives I meet a lot of Executives who feel like they can't uh um talk about it or or do something about it you know every we're all human you know it's uh really not that big of a deal uh anyway oh I'm having all kinds of systems issues database connection issues nightmare yeah you can go to uh github.com martiny macro will affect all of the your industries equally so you don't really have to follow the macro if you worked at a hedge fund and you start talking about CPI people laugh at you like what the hell do you know about that unless you're a macr Trader you know that has spent your whole life on macr trading then in which case you you know which I'm not by the way then you don't have to worry about it at all all right let me see have to investigate okay [Music] for all right so it does look like there was some I guess Co pickup period let's continue to look at this for Airbnb it's another company that's kind of operated outside the law in a lot of ways sort of like uber don't appear to pay taxes but that's probably because they lost gobs of money during Co or something Steve Cullen or Stan drucken Miller oh man I don't know you got talking about two very rich guys that have been very good at the stock market that's like arguing about Michael Jordan or Lebron James or something like that you know I'd say Steve Collins probably had more of an impact on Wall Street you know um dren Miller certainly is an incredible investor but uh you know Steve Cohen sort of had a kind of a big bigger business environment Duane and uh Point State I guess Point State wasn't really stand anyway but uh point is uh you know Cohen's sort of Empire on Wall Street is sort of was always were bigger than Dr Millers if that makes sense so his footprint was kind of bigger not that that's the BL and all Co Cohen never uh went to chil no Steve Cohen uh was uh generally kind of vaguely accused of insider trading by a lot of people um but never really stuck in any particular way you also have to think about the era that Steve grew up in a Wall Street was Rife with insider trading I mean information Arbitrage quote unquote was very very popular it's a lot less popular now um but back in the day you know it was all about what information you had that's changed a lot you know people are no longer scrambling for secret information primarily because it's kind of illegal to do so but also because it it doesn't seem to work that great you know company's results could change quickly and if you want to build a scalable Enterprise you can't you know be try to be on top of every single stock and every single market and you're in and out as soon as the conditions of that company's earnings change that's not really a great way to invest you know Warren Buffett doesn't invest that way for example you know it's kind of a silly thing you're looking for companies that have you know the ability to to grow and things like that I mean you make tons of money when you can do that you can buy one stock that can really become a a world leader that's what Buffett did again I'm not saying CO's strategy you know speaks for itself his results are incredible you know but his results are kind of like funding lots of traders in essence to manage you know smaller amounts of money and um you know hope that they can outperform the market and you know that's worked really great it's a it's a brilliant move that he was sort of a somewhat of a Pioneer on you know uh the whole Pat pod shop it's kind of the way some people say it but giving a portfolio to different analysts like for example in this chap I would give Ergo 44 $200 million to trade biotech and I would give like Smasher $500 million to Trade Tech um and I would give Matt a billion dollars to trade consumer and and whoever did the best I would give them more money and whoever did the least I would uh did the poorest I would say I would take take money out of their accounts and fire them so that's kind of the way Steve Cohen works and then I give sheepe big homie sheepe I give him 10% no matter what he gets a taste off the rip that's a ran that's just what albanians do you know I'm a big Damen Hurst fan Warren buffit is the greatest investor ever all right this is the 10K for for Airbnb so if you haven't glanced at it um you know here's a chance to read an important document the 10K represents the annual report for the company it gives you all the details about the business really critical to read these 10ks I remember in my College library we'd have annual reports I thought it was pretty cool lying around so you could uh always pick up an annual report and read something like the Airbnb annual report so really cool College uh perk I had when I went to uh Baro College who's the gayest investor let me think about that um well when you say gayest I think sort of a sort of stereotypically um um let me think there is s a silly [Music] question as in flamboyant I really don't know yeah there's some very successful gay investors um I know a couple um I'm trying to think there's one I mean who everybody's probably thinking of who's one of the wealthiest people in the world you know what maybe I had to go with David geffin David geffin Peter isn't flamboyant yeah I'm gonna go with David gin or David hinor even though h's not okay I don't squash beef all right so interesting situation here for Airbnb let's take a look the 2019 Revenue this is all CU Co right so this is like the most messed up thing that could happen to a new business uh obviously it's the most messed up thing that could happen to Society too but we just have our business Hat on at the moment so they had 4.8 billion in Revenue right and then for 2020 they had 34 so 4.8 to 3.4 big Decline and then 2021 pick back up and we can see kind of what pace we're on for it's very seasonal you can see all the revenues in Q2 and Q3 three and then I guess in the winter people don't really use Airbnb again I'm not an expert at Airbnb I've only used it once had a and again I strongly encourage everyone to sort of ignore their own personal experiences with these stocks I know there was this big meme when I was a kid I actually remember uh quite quite vividly reading uh one up on Wall Street by Peter Lynch in uh around probably April or May of 2000 um I was living with my parents at the time and wanted to be a stock market genius and I read about Peter Peter Lynch's advice that you know you can go to the mall uh your local mall and sort of see what stocks are doing the best by seeing who's selling the most product and stuff like that in in your own mall now that's nonsense you know I I really think there's there's no there's no benefit to doing that you know investing is a lot more sophisticated than that um you know it's there's no doubt that that that you know obviously there's some you know feedback you can get but the the stock market knows this kind of stuff the stock market knows if a company's business is doing well maybe things were a little different in the mellin days and I don't want to take anything away from Peter Lynch who did very well but um you know the the the world's changed quite a bit since then and I I really wouldn't endorse that approach investing is about buying something for the right price that's something that I try to stress to everybody you know there are good companies that are bad companies but in a lot of ways that's not that relevant to the investor the investor buys at a good price there's some great companies like apple where there's just not a price that you know you would ever uh want to use uh that price as your purchase price and there's some terrible companies that you know you you'd want to buy at the right price you know I'm talking a lot like a value investor of course in the long run growth growth tends to obscure the the utility of price and price discipline for example if you really were convinced that Apple was a great company 10 years ago or 15 or 20 years ago would have been a great call no matter what price you paid um but that requires like a really unbelievable ability to uh see the future and often that's fairly [Music] [Music] stochastic okay so Airbnb 4.8 billion 3.4 billion so that's Co down 30% up to six billion that's the co rebound and then uh 40% growth for 2022 um pretty interesting I had this like natural aversion to this company for some reason but as I'm glancing at it I think like it could be along and again I'm trying to let my psychology talk to me and listen to it which is something a lot of Traders have trouble with there's a lot of talk about this in RV's book trading to [Music] win which I highly recommend if you want to learn how to trade which again is not my thing if I was trading you'd see me with 35 screens six cappuccinos four assistance two phones hanging off of my shoulders and you know that's just not a fun way to to live life um screaming at some broker if you can do quantitative investing you should machine learning is just one tool to do quantitative investing with ML is uh kind of an overused term there's there's a lot of ml models just check out how hugging face for example oh wow look at that produ all the cost I wonder if that was a one time item in there should I look at AMC or gme you want to be uh self-loathing [Music] today I don't understand what what got into people for those stocks like what a crazy crazy dynamic there's so many things wrong with that whole situation I don't think every good investor has an edge I don't like that word Edge it's in old Wall Street was synonymous with Insider info basically right let's look at this uh kns and experiences booked I don't know what that means nights and experiences [Music] booked is that the way they measure their business 3.6 million Knights so that's almost 365 but it's a very simplis it's a more Global business than I [Music] thought so 114 million knights in North America that means that in any given day 300,000 people are St staying in an Airbnb on any given day should probably call these stays instead of nights but I'll use their terminology for now they more EMA usage than North America that's [Music] impressive all right so Knights grew let's see if Knights grows faster or slower than Revenue probably the same so we can also get arpo okay Knights grew faster um so 6 billion revenue for 300 million nights means 20 bucks for Airbnb every night so they're getting like a 5% fee or something like that right we don't have the gross market value there it is gross booking value probably don't need this geographically split quite yet um 46 877 it'll be lazy and just take the the total amount look at the the North America revenue is a lot higher than EMA even though there's more Knights so the average place on Airbnb is much more expensive um in North America which makes sense so most prices are out of control all right so the average Airbnb is $156 a night remember that's Global so the average North America let me just do n North America gpv this is kind of similar in a lot of ways to other models I built you know where you have to sort of look at the whole hotel industry how large is the hotel industry period and then think about how much can Airbnb take of that that's the right way to model this and that's probably you know made some venture capitalist pretty [Music] rich pretty great investment if you could uh made it right all right so the average North American Airbnb is $222 a night which again in New York City it's quite a bit more we work yeah just go to GitHub uh I have a GitHub uh github.com marcley there's a couple of repos up on there um the stock market one is called models am I your favorite eag girl should I should I take my shirt off can I do that do dudes can dudes stream with their shirt off I have to get buff first once I get buff I'll do it hey font Happy Valentine's Day how's my German friend I was just with a a great crypto German who was watching uh this channel since he was 17 and now he's done very well in crypto very happy for him no nipples allowed period you got to free the nip Man daily reminder to [ __ ] Serbia you know we've uh some albanians have forgiven the serbs and they've made friendship some have not Airbnb oh look at this just the data I needed we want to go back in time for Airbnb all the way to the distant past of 2016 I don't even remember 2016 so isn't that a funny chart they basically have been able to weather Co isn't that crazy look at this oh okay they have a typo thank God 37962 do6 there we go okay just to you know decline due to co that's weird their 2021 nights has not fully recovered um from 2019 even though gbv did it's a lot make sure I'm getting this right that seems like cuz GE so weird because revenue is higher I guess it just had really low arpu or gbv per night or whatever so even though they had fewer stays they had more revenue and more gbv gross booking value for anyone curious it feels a little weird to [Music] me this is really great business lesson um for me as well Airbnb is a really fascinating company and it's a great way to test whether or not you're you can forecast correctly if you can forecast a company like this or like Netflix you can you can forecast anything for wow look at the co quarter they basically had no bookings makes sense but they had a pretty good next quarter it's crazy down 72% holy moly well glad they got through that this is a really interesting company I'm really enjoying this now we'll get to the fun part this is sort of the maintenance part just uh perusing the the past of the business now we're going to think about the future this is much more interesting and much more fun and much more difficult this part's quite easy anybody can do this part Lord knows you've seen me do it enough times you should be able to do it one two three the next part requires you to put your thinking cap on get a cup of coffee and really start to get cerebral this is the part that makes you rich or the other way around many times uh both I should probably plug in cash flow just so we have a sense for that I don't think it's going to matter that much but I think it's uh useful they don't have much capex which is good I want say good just a fact get one more cash flow number basically you got the thinking cap good we're going to need it okay ton of cash flow [Music] in 2021 so the company actually even though the net income was reported to be 500 million they actually generated $2.2 billion of actual cash so real [Music] profits and almost no cacks only 25 million of cacks so I'm guessing they just run on AWS or something like that they have an AWS Bill and that's how they have cacks so how many this is the way that I would do this this is why you guys pay me the big bucks how many advertised how many hotel stays occur in the US every every day or every year what would you guess 10 10 billion over the course of a year or is 365 days so if 10 people are using hotels if a million people are using hotels every night that's 365 million is 1 1 365th of the country in a hotel on any given day it's a tough one let's see us hotel stays hotel stays annual this is occupancy rate I don't know that we want that so there's 5 million hotel rooms 66% occupancy 56,000 hotels but there's motels too occupancy 57 58% side revar is revenue per available room which is a industry statistic 52,000 hotels again the number of hotels doesn't really matter to me I'm really thinking about the number of rooms Maybe [Music] here's an interesting statistic 142 billion in Revenue [Music] [Music] h [Music] okay 1.3 billion okay the numbers seem to be all right so it looks like Airbnb has like 10% market share of all hotels but they've also kind of created a new kind of experience in a lot of ways right also want to see airbnb's fourth [Music] quarter oh it's not out yet comes out tonight after the close cool so again 1.3 billion rooms it sort of solves the occupancy problem right so the problem with the hotel is you have an occupancy issue where you know a third of the time your room is empty and you don't make any money with Airbnb there's no real occupancy problem so they can kind of operate more efficiently H welcome all my German friends so is it possible that what I mean what percentage of hotel stays could actually be done through Airbnb and again it's sort of an extra new experience right it's not like is it hello I'm not banned from Airbnb yet this is tricky if you think about it they they have like 6% of global Hotel Revenue this is a really interesting business problem this isn't just about one stock this is about a process that you could repeat for lots of stocks I want to make sure I do it right so that might be less entertaining than some other streamers but I think I'm a bit more cerebral 9 month cash flow for Airbnb 3 billion that's [Music] record I don't think there are too many streamers actually punching numbers so I agree with you on that but all right let's say they can get 25% I've sort of settled on that number in my in my mind they can get 25% of of all the rooms in the US they grow 30% a year for the next four years maybe they'll grow a little slower for more years like that but that's the gist of it right they do the same thing in the rest of the world their arpu stays relatively steady the revenue is nights times Ru right sales and marketing has not gone up it's amazing people just use Airbnb that is so crazy what a problem when you don't need to advertise it and your product is still growing and growing isn't that crazy think about that oh man I'm going to hate this if I love this stock I'm going to be annoyed because I hate the company but I'm going to love the stock it happens going to never use their product all right can they get this much market share of the hotel business I that's another question that's where the discount rate comes in right oh man I guess I'm not going to love the stock so I thought that was going to be a big number but guess what the share price I calculated was 120 five 126 current stock price 116 man I guess the Market's just really good at discounting that's kind of crazy I I don't know why it it would seem like it it would be a lot better along than that it's only like 20 times earnings how could it not be a better better long let me adjust my numbers until it is that's the what you should not do that was a joke huh well I guess there's this issue where even even if they grow 20% for a little while they're going to hit a wall they can't replace hotels right uh I don't look at oil stocks I'm sorry just out of my expertise maybe I'll try it someday they can't take over the entire Hotel industry so I uh I did 25% which is quite a lot they're at 10% right now and they reach sort of a a Peak at 25% so if they hit that 25% that's already in the stock you already get that basically in the current stock price yeah tumas and AAC 1930 I think you're right I do have a bare model some business say is an Airbnb I agree with Anthony s the Airbnb process is a little annoying but there are people who want as I thought about that 25% number I thought about people who really are price sensitive or experience sensitive where they want a specific thing and Airbnb kind of fits that pretty well for that chunk of the market for the business traveler it doesn't often make sense but it can help a business traveler when hotels are really overbooked for conferences and stuff like that