Airbnb, Apple, Tesla: Disruptive Companies That Put a Hurt on Competitors

NEW YORK (TheStreet) -- I was skimming the Twitter feed and read a tweet about Web accommodations site Airbnb raised more venture capital funds recently and is being valued at around $10 billion. About a year-and-a-half ago, I tweeted one of the founders of Airbnb, Joe Gebbia, asking him how the company got its name and what it meant. He tweeted me back and sent me a link to a video explaining the name ... how cool is that?

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Airbnb is so disruptive to the hotel industry. I was mulling that over as I was helping a friend find an Airbnb in Los Angeles.

So I started wondering if disruptive companies can disrupt the stock prices of their competitors. What will the impact of an Airbnb be on such publicly traded competitors as Hilton (HLT), Hyatt (H) and Marriott (MAR)  whenever Airbnb goes public.

Since Airbnb hasn't had its initial public offering yet, let's look at other stocks in other industries.

When I think of disruptive companies whose stock is publicly traded, the most disruptive ones I can think of are Apple (AAPL), Tesla (TSLA) and Netflix (NFLX). I wondered if there is a measurable way to see the impact on the competitors of these major disruptors by looking at the stock prices of their competitors on their IPO date, one year after, and many years later closest to current date.

Apple disrupted the computer industry and nearly took out IBM (IBM). Apple disrupted the entire music industry -- specifically with the iPod, which nearly took out all MP3 players made by Samsung (SSNLF) and Sony (SNE).

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By looking at this data I conclude a majority of the disruptor company's competitors' stock prices dropped as the disruptor stock had its IPO.

Looking at the disruptor company's competitors stock price a year after the disruptor stock had its IPO, you will not see any major correlation or pattern.

However, if you look at the stock prices of the disruptive companies, you may notice a very important pattern. All of their stock prices seemed to jump up substantially, from IPO to current price, and in a shorter period of time than the competitors.

Airbnb will be regarded in the same way as Tesla, Apple and Netflix. Airbnb's new $10 billion valuation places it in an exclusive club of the only 9 venture capital-backed private companies worth more than $5 billion. Airbnb will be one hot stock when it drops.

Innovation can always come at the cost of having to jump over extra legal barriers that haven't yet been broken down. As long as Airbnb can avoid any legal issues (like Tesla's involving selling cars directly), Airbnb will have a very smooth and successful IPO. So far there are a few legal issues with Airbnb regarding the state of New York and people running illegal hotels.

But these are all things that will be worked out. Innovation will always find a way.

Whichever way you go with Airbnb, short or long, I wish you

Many Happy Returns,


TheStreet Ratings team rates APPLE INC as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:

"We rate APPLE INC (AAPL) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, expanding profit margins and solid stock price performance. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 8.9%. Since the same quarter one year prior, revenues slightly increased by 6.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Although AAPL's debt-to-equity ratio of 0.26 is very low, it is currently higher than that of the industry average. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.18, which illustrates the ability to avoid short-term cash problems.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Computers & Peripherals industry and the overall market, APPLE INC's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • 44.56% is the gross profit margin for APPLE INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 20.69% is above that of the industry average.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 47.87% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, AAPL should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.

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