Long term readers know that I have covered the (online) travel industry intensively and that I actually have build up a “post pandemic travel basket” recently. Therefore, I was really excited to look at AirBnB’s S-1 going public filing.
Airbnb is one of the most prominent Unicorns of the last decade. The company was founded in 2007 and has since then become one of the really big names in online travel. It describes itself as having established a new category of travel called “home sharing” and that all the hosts on the platform as well as the clients are a big “community” that make travel “Human”.
However the big “elephant in the room” is the question: Why do they go public now after 13 years ? Why didn’t they go public earlier or wait a few more months once the travel recovery really kicks in ?
There was already a lot of press coverage already for Airbnb in the past weeks. I think in general one could distinguish between the Bull Case and the Bear Case:
The Bull case :
- It’s a “positive” global brand with strong growth potential and a huge TAM (all travel lodging globally )
- People will rent apartments first if travel rebounds
- Restrictions maybe less a problem in cities after Covid-19
One of the biggest cheerleaders of the Bull case is clearly Prof. Scott Galloway who wrote a big post some days ago, putting the value of AirBnB at 120 bn USD with the following statement:
Disclaimer: this is not investment research. PLEASE DO YOUR OWN RESEARCH !!!!
Play Magnus Group – Again
I really hesitated if I should keep this private but then decided against it. Believe it or not, I have again bought shares in Play Magnus. After initially buying the stock at around 16,90 NOK per share, I sold the shares at a loss at 14 NOK per share. Buying now again a 2% position at 17 NOK per share looks extremely stupid, but these are the reasons why I still did it:
- when I bought the shares initially, I knew very little about them and I underestimated the volatility of Norwegian small caps which can easily move+-10% on a single day
- With the stock falling so quickly and with no news, I was afraid that some people might know more about the Q3 numbers which would be the first quarterly earnings after the IPO
Disclaimer: This is not investment advice !!! PLEASE DO YOUR OWN RESEARCH.
At first a big “health warning”: My track record with Spin-offs is awful although I dedicated significant efforts into this area. Over the last years, I missed out on several good ones (Uniper, Trisura, Osram) and I unfortunately invested in a few bad ones (Cars.com, Metro). My best spin-off investment so far was Italgas.
Siemens Spin-off history
Siemens itself is an interesting case, as under (soon to be former) CEO Joe Kaeser, and even before, they are one of the few German companies that use spin-offs more or less frequently. Over the years, Siemens has spun off for instance Quimonda (bankrupt), Infineon (has recovered quite well), Osram (taken over by AMS) and Siemens-Gamesa (very volatile but strong performance lately). Overall I would say that on average the Siemens Spin-offs did very well despite being mostly “ugly ducks” at the time of spinning off. Siemens Healthineers in comparison was not an ugly duck (despite the stupid name) and that’s why they actually IPOed it.
Siemens Energy AG Spin-off
This is the latest spin-off from Siemens, spun-off on September 28th with a first price of around 22 EUR, a lot lower than initially expected. As we can see in the chart, the shares dropped at first but now recovered to the initial level in line with Siemens AG and the DAX:
Just a few days ago we had a total different situation when I wrote my last panic journal entry:
Covid-19 infections went parabolic again, lock downs had already started, the US election was still in front of us, there was really bad weather and markets were in a suddenly very depressive mood.
Just 8 or 9 days later, things look different: Joe Biden has won and The German-American Duo Pfizer-Biontech released very promising (early) results of its Phase III Study.
As I am not a vaccine/Virus expert, I’ll link to a post on how to interpret the results and try to summarize them:
At first some good (or bad) news: By going through the German stock markets once again, I detected that my initial list was already outdated and that I missed quite some new IPOs and listings, so there will be (at least) one more post with German shares after this one before I then can wrap up the series into a condensed watch list.
This time, the 25 (to a certain extent) randomly selected (and US election free) stocks resulted in seven stocks that might be in principal worth watching and/or follow up.
751. L-KONZEPT Holding AG
L-Konzept is a 2.7 mn EUR market cap real estate company that has little business and small but consistent losses. “pass”.
752. Krones AG
Krones, a 1.7 bn market cap company is often considered one of the typical “hidden champions”, being the world leader in manufacturing bottling machinery for the beverage industry. With Covid-19, the whole beverage industry is clearly negatively effected which in turn might make business more difficult for Krones. However if we look at the stock chart, we can see that the stock already peaked in 2018:
Back in lock down mode
Four weeks after my first post of “season 2” it is pretty clear: Wave 2 of Covid-19 is definitely here and growing.
In contrast to my assumption and the general feeling 4 weeks ago, Europe is now back in lock down mode. Certain areas in the UK, Spain, France, Italy and Belgium went into different forms of lock down already a few days ago. Here in Germany I think many Germans got the message, when the German Health Minister Jens Spahn had to announce that he got infected a few days ago.
A “lock down light” will come into force in Germany on Monday with restrictions on contacts and closure of Restaurants and Bars. Austria just announced a harder version which for instance disallows any private visits after 8 pm which in effect is a 8pm curfew under another name.
What’s different this time compared to the first lock down ?
Interesting feature on Japan’s richest man Tadashi Yanai, founder of Uniqlo
Highly recommended: Superb write-up from smallcapseurope on Greek company Flexopack
UndervaluedShares thinks UK publisher Pearson is worth following
The Profit Hunting blog with an update of its dividend portfolio
Valuesque has a very useful primer on how to value stock option plans
Another “must read” from Ben Evans: On the future of retail and E-commerce (Spoiler: Nobody knows anything)
Despite his performance issues, David Einhorn’s Q3 letter is worth reading