Hey everyone Me: Kevin Here is it: Airbnb about to collapse. So far, we have been told by Airbnb that demand is still high and strong and everything is good. Don't worry here, there is no problem at Airbnb. At the same time, we've seen virtually every single real estate company seize up. but airline travel is still pretty dang strong and so it makes me wonder maybe Airbnb is right. Maybe Airbnb is the exception in the real estate world where Redfin is closing down their home flipping business and now laying off over a total of 27 of their staff this year. you've got Zillow that got out of the home flipping business last year and they've started laying people off. You've got Open Door who's uh, or even was a SPAC home flipper that now is deciding they don't really want to be a home flipper anymore and they want to become a housing Marketplace Nobody knows what the hell they're doing in in real estate and it's probably because they haven't taken the zero to millionaire real estate investing course where you actually learn how to build wealth with the sixty percent off coupon code down below. But you've got companies like Airbnb that have quite frankly been killing it. And again, it makes sense because air travel is killing it right. But is air travel potentially unique Because see: air travels entire? Market Uh, that is its availability of flights and planes. And Pilots the entire available Marketplace of of airplane tickets has actually shrunk by 10 since 2019. But demand is a way higher now than what it was in 2019. So you've basically got more demand going into a smaller box. And that's why we feel so overwhelmed at airports lately with delays, too, little staff, and everything just feels like chaos. It's getting slightly better, but it still feels pretty bad. So this is why the airlines are actually doing pretty decently and they're able to start paying off their debt because they have a smaller box and they're just fitting more people in it and charging more money for it. So what about Airbnb And are there some potential red flags that could indicate what Airbnb is telling us isn't actually true And could Airbnb be a short? Oh, I Can't believe I would say that because generally meat Kevin doesn't short meet. Kevin only goes long. All right. So what do we got about Airbnb That's making me a little distracted. Well, there's this company called Vacasa. They're a. uh, they're basically like a middle person between a platform like Airbnb where Airbnb allows you to list short-term rentals and people can view them and rent them when people do. Airbnb takes a little cut. Then there's the owner of the property, somebody who's a landlord who ultimately wants to take the leftover money after all expenses. Uh, from the Airbnb fees that people are paying the total listing fees. So Airbnb gets their cut and the rest generally goes to the owner of the property. Well, sometimes there's a management company in the middle, a management company in the middle, might have their own website where they can advertise short-term rentals, or they might list them on Airbnb They could buy property management companies that have a bun like a portfolio of properties owned by other people and basically they go in the middle and there's this. This company vacasa has given us some really interesting insight into the vacation rental industry. That's quite a bit of a contrasting story to what Airbnb is telling us. Then when we compare that to what Airbnb actually told us, I think the red flags start becoming really apparent and I'm going to show you in this. So let's go start with the earnings call for Vacasa. Do keep this in mind that if Airbnbs and this was my expectation just based on anecdotes in the market. My expectation was that Airbnbs are starting to kind of hit a wall starting in in October November I'm hearing a lot of people talk about Airbnb sitting a wall, but I don't want to invest my money on anecdotes, right? I Like facts and so that's why I was looking at the Airbnb conference call and earnings report thinking okay, like where's the Slowdown I'm I'm not seeing this slow down yet but are we looking in the rear view mirror Because you know when you're looking at an earnings report from last quarter, you're looking at September August and July which was really the hot summer travel season and it was definitely a hot summer travel season. Uh, so, but if you hit a wall now, well, that's going to be a red flag for Q4 And so I Looked at the vacasa earnings call and take a look at what I found over here. They say our fourth Quarter Revenue Expectations Remember, they're a company that makes money by collecting a fee, doing vacation rentals, potentially putting stuff on Airbnb right and then whatever is left after the Airbnb fee and whatever the owner wants goes to vacasa. And and people might say, well, the owner just deserves less. But if the owner deserves less which might be true, the owner might say I'm just going to sell my property and get out of vacation rental business. I'll just contribute to more houses for sale housing prices will fall more. That's kind of the trajectory things are going at anyway. and then what happens? Well, then they cost a loses even more clients and then they make even less. Revenue So look at this earnings call that just came out. They say our Fourth Quarter Revenue Expectations are lower than implied fourth Quarter guidance we issued in August So lower Revenue than they guided. We are experiencing some softness and variability in guest bookings that began after the strong summer season. That weakness was noticeable in December I'm sorry in September which is the last month of the quarter. so Airbnb could tell you oh yeah, we're killing it. We're killing it. You know, because because, really, you only started noticing the softness maybe at the end of the last quarter, right? And this is because I remember that and has become more pronounced in the fourth quarter. Remember, we are are already about six weeks into the fourth quarter. We're about halfway through the first. Uh, fourth Quarter. It's weird because we're just now getting earnings reports for the third quarter, which ended September 30th. but October is over and half of November is basically over. So we're halfway done with Q4 already. We expect fourth quarter ebitda that's earning basically near bottom line earnings. I'm not going to explain an accounting course in this one here, but we'll keep it simple: Earnings before interest, taxes, depreciation, amortization, blah blah right? Okay, we'll be in the range of negative 75 million to negative 65 million. Again, this is lower than implied due to lower Revenue but it's also a function of higher operational costs. Uh, going into the fourth Quarter not fully realizing the inefficiencies from operational initiatives. Finally, we are not issuing 2023 guide. So I Wrote some notes here because I'm like this is so bad I Looked at their cash flow statement and their balance sheet and I'm like, well, if they end up losing 70 million dollars, they've only got a cash burn of five quarters left and then they go bankrupt because when you originally looked at their P E ratio like wow, this this two dollar stock is is actually looks really cheap but then then you're like wait, but is it a value trap right? And like I wouldn't touch this freaking thing with a 10-foot pole. But and I mean it might float up Because right? Rising tide lifts All Ships right? But they're They're projecting almost no growth. potentially even a decline in year over year gross bookings. Okay, that's a huge number that Airbnb pays attention to. Uh, so they overspent on staff over here, vacasa at the peak, uh, and and overpaid probably for properties. They don't actually own properties, but they can buy a portfolio that somebody else manages so they potentially overspent at Peak they're They're complaining that their sales process just sucks, and that's why they're having a harder time attracting people. they spend a lot of time in their earnings. Call talking about how they're getting this new customer resource manager online and once that's online, then they're going to be so much more productive. And I'm like, dude, if you're relying on a customer resource manager, you don't know how to sell. You don't know how to run a business. This is something that we're actually talking about in the elite. Hustlers University Course, it's all about business and increasing your top line. I Mean people spend so much time getting addicted to Crms and spending money gives Salesforce more money. That's not how you sell. If you're relying on that, you're screwing yourself and it's okay to have a CRM but you actually don't even have to pay for one. We talk about how you can get one for free. a really, really good one you in in the elite hospitals anyway that's linked down below. Uh, also has that 60 coupon? Uh, But anyway, let's look at some of the other pages in in this earnings call and then what I want you to see is the Airbnb call. All right. So moving ahead a little bit, listen to this. The weakness is relatively new. It kind of began towards the end of the third quarter. Ah, so Airbnb would actually be justified in telling you, oh, everything's great because the weakness is actually you know, relatively new and maybe it was just a bad week. You know you got to picture these people in their board meetings before they actually go have an earnings call. Like okay guys. like the last quarter of September was not good, but everything else was great and then that's all they talk about is how great everything was. So it kind of began towards the end of the third quarter, particularly with forward-looking bookings or Advanced bookings and seeing some variability in our booking Trends Deviating from previous years, it's tough to identify the driver. Maybe it's consumer demand, Maybe it's macro. or maybe it's just the vacation rental market that's just slowing down and it's hard to pinpoint, but we're seeing it across all channels. So in other words, they're just getting screwed and pounded everywhere. Uh, they talk about their CRM BS I wrote a little note that no, that's BS they just can't sell. which is probably true this I wrote down they're basically a monkey in the metal company right again I Explained that earlier where Airbnb is going to take their fees, the landlord wants a minimum amount of fees, otherwise they're going to sell and then they Costa loses their client. Uh, so so they they kind of get screwed in the middle. they take the big loss. This is why I wouldn't touch this with a 10 foot pull. and I pay attention to companies like this too, because I want to see what some of these companies are doing who handle short-term rentals for the purposes of house hack as well. Look, if the short-term rent, the market dies, We'll just do all long-term rentals or our medium short-term rentals, right? So this is a very important thing to pay attention to. Remember: if you're an accredited investor, make sure you invest before November 30th to get the maximum warrants possible. So they're kind of like free call options, but read all the details on that uh, in the subscription agreement at Househack.com on one hand churn. Okay, so yeah, owners are potentially dumping and not buying short-term rentals. It doesn't surprise me that people aren't buying short-term rentals right now, because why would you? uh, not seeing any meaningful uh, changes in cancellation rates that are notable? It's just bookings that are coming in right? Uh, different. So I make some little notes about comparisons to Airbnb uh and and then they actually suggest that maybe a way they can make more money is trying to convince people to Airbnb their home when they're not home and I'm like that is the stupidest thing I've ever heard I will never Airbnb my home so somebody else can roll around in my bed when I'm not there like that is. that is beyond stupid. But uh, that just shows you that they're grasping at strong draws and that they're kind of desperate. So now I want to show you the Airbnb call because it's a little bit of a contrast. The Airbnb call initially only talks about how much demand they have to talk about how great everything is. stronger demand. demand for domestic and non-urban travel remains strong and sure, is it possible that Vicasa just has a small portfolio on demand for all of their properties? This crap all of a sudden compared to uh, you know, prior quarters. all of a sudden they just have like a terrible reputation. Sure, maybe. but I don't think so because here they talk about hey, travel isn't getting seeing a pullback. You want to go travel so you can see time, spend time with your friends, see your family more inspirational type of travel and I'm thinking to myself gosh, these guys are selling it hard man. I mean this is like Elon going in telling you Tesla's gonna be worth more than Apple and Saudi Aramco combined just days before he goes and dumps 20 million shares on you. You know, All right. Okay, so a lot a lot of good news here from Airbnb about strong demand and inspirational travel. Blah blah. So where's the red flag? All right, And then here it is. Look at this. the CFO is asked about Q4 and backlog and what he says is in terms of the backlog for 2023 It's really too early to tell, but what we're seeing is continued strong demand for travel overall and I'm parsing this when I first read this I'm like oh this is this is good but notice he's not saying we're seeing continued strong demand for Airbnbs. He's saying we're seeing continued strong demand for travel. Sure, that could be justified in that you're seeing strong demand in the airline business. And that's true. You are because the airline business is smaller than what it was pre-pandemic So yes, you are still seeing strong demand for traveling. and if you look at 2022 or 2021, you're still seeing stronger demand. But that doesn't mean you didn't just hit a wall. especially when you're saying it's too early to tell you a good forecast for the beginning of next year And this in, uh, this this idea of strong demand for travel does not mean strong demand for Airbnbs. And when you look back at historic levels of growth, we're seeing stable to increasing demand. Okay, so going back to 2019, but Airbnb You're valued as a growth company. If your growth collapses and your growth is, you know one percent more than 2019, people are going to lose their crap. Remember Airbnb blew up during the pandemic because people didn't want to go to hotels and then we have strong bookings on the books for Q4 But then there'll be fewer uh on the books. It kind of tails off into 2023.. So this is kind of like in my opinion, a lot of BS with just enough of an early Red Flag Warning that vacation rentals are about to hit a freaking wall. and it is possible that Airbnb collapses if their growth rate collapses. Okay, Airbnb let's look at your numbers in Q3 2022. Y'all had about 2.8 billion dollars of Revenue and now you're trying to tell me that your revenue is stable or stronger than 2019. you all had a fraction of the revenue in 2019. How do I know that? Because all I have to do is scroll to a quarterly summary from a different earnings release that you have which I've injected into this PDF and look at the queue the quarterly numbers for 2019.

you're knocking on the door of three billion dollars right now. Two point, eight, eight right? And what are the numbers you have here? Dude, you barely had three billion dollars in three quarters over here in Q3, you are at one Six in Q4 you were at 1.1 billion dollars. And look at that decline you tend to see going into Q4. The point is, do I really want to see uh, not only that seasonal decline, but then you referencing 2019? It's entirely possible that their bookings are hitting a wall. and look at that in Q4 you do tend to see a decline. But they're also not just talking about a potential seasonal decline over at Vacasa, They're talking about a potential real decline. Bookings going into all of 2023 for reasons that they're not even aware of Airbnb is not giving us the red flag other than the fact that they're now alluding towards comparing themselves to 2019 and not the prior quarters. In my opinion, if that strong growth rate of Airbnb goes down and we start seeing in negative live year-over-year growth, which is entirely possible. if in fact, we could just look at Q4 2021 was at 1.5 bill. Imagine if we went negative or the growth rate went from the 29 27 29 it is now year over year to something like five or ten percent valuation of Airbnb could collapse and the last thing anybody wants to see is a collapsing valuation. So if you're in the vacation rental market, leave me a comment down below. If you want to learn how to do analysis like this, we've got a new fundamental Analysis lectures coming out in December totally for free for the stocks and psychology of money groups. Make sure to join that. Make sure to get the free lectures that are coming out as well for the zero to millionaire real estate investing course if you join now you get lifetime access to all the content.