Is Airbnb more valuable than Marriott?
That’s what the Wall Street Journal tells us this morning. The online marketplace is in the midst of a fundraising round that it hopes will value the company at $24 billion – surpassing the hotel giant’s $21 billion. Airbnb has told prospective investors its revenues will pass $900 million this year. Marriott, which manages 4,000 hotels, brought in nearly $14 billion last year. Marriott CEO Arne Sorenson and Airbnb CEO Brian Chesky were my guests at the White House Correspondents dinner last month, and both cheerfully insisted they are not – yet – in serious competition with each other. Marriott relies mainly on the business traveller; Airbnb on more casual travelers. But if Chesky is going to live up to those kind of market expectations, he will have to give Sorenson a run for his money.
Meanwhile , Fitbit’s IPO priced at a better-than-expected $20 a share, bringing in $740 million, and putting a value of $4.1 billion on the fitness tracker.
Does anyone think it’s time to stop giving away free money? Janet Yellen is not quite there yet.
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• GM, FCA bring in advisers in merger fight
Both General Motors and Fiat-Chrysler Automobiles have hired investment banks to advise on a stand-off that finds FCA looking to force a deal to combine the two automakers. GM rebuffed FCA’s merger proposal earlier this year and GM CEO Mary Barra said this month that she has no interest in a deal. But FCA TK Sergio Marchionne is apparently still working on a merger plan and his company is now working with UBS. Goldman Sachs is advising GM, with Morgan Stanley also involved.
• Stocks up, dollar down after Fed statement
Short-term Treasury yields fell and the U.S. dollar weakened against the euro after Janet Yellen’s announcement that the Federal Reserve revised down its economic estimates for economic growth this year. U.S. stocks rallied following the announcement that the Fed will keep interest rates near zero, with the central bank now forecasting the economy will grow by no more than 2% in 2015, rather than the 3% growth predicted in December. The Fed said it will still raise interest rates sometime this year but said the increase will happen more gradually than what was previously expected.
• Germany’s Merkel says Greek deal could still happen
German chancellor Angela Merkel said Thursday that Greece could still reach a deal with its euro zone creditors if the country shows a willingness to implement strict financial reforms. Merkel said: “Where there’s a will there’s a way.” Greece’s debt negotiations have so far been tense, with the country’s leaders frustrating lenders with their unwillingness to bend on the issue of reforms. Concern over a potential Greek exit from the euro zone sent the Athens stock exchange to its lowest point in nearly three years Thursday morning.
Financial Times (subscription required)
• Kleiner Perkins’ trial bill to cost Pao
Ellen Pao already lost her discrimination suit against her former employer, Kleiner Perkins. But, now, a San Francisco judge says the tech executive will have to pay nearly $276,000 to cover the investment firm’s trial costs. Kleiner Perkins originally asked for nearly $1 million to cover the legal fees. Meanwhile, Pao has offered to drop her appeal of the decision in her discrimination suit if the firm pays her $2.7 million.
Around the Water Cooler
• Uber’s California troubles could affect others
A California labor commission’s finding that Uber drivers are employees, and not independent contractors as the ride-sharing service has maintained, could throw a wrench in the $50 billion startup’s rapid expansion while also having repercussions for the so-called sharing economy on the whole. While Uber has faced many other challenges to its definition of drivers as contractors, the company has thus far managed to avoid unknown additional labor costs that could take a bite out of its bottom line. Other companies that rely on independent contractors, such as Uber rival Lyft, should be on high alert.
• BuzzFeed’s new mobile app gets serious
BuzzFeed may have a reputation for click-bait posts and viral “listicles,” but the media site’s new mobile app looks to highlight serious reporting from a growing investigative team. Unveiled Thursday morning, the news app is meant to focus on more serious fare, as BuzzFeed already has another app featuring, among other things, “LOL” stickers and galleries of animal pictures. In a recent interview, BuzzFeed founder Jonah Peretti emphasized the importance of serious news to a large media company, even if entertainment is a bigger business.
• Here’s how Obama can save his trade bill
The White House is moving quickly to rally pro-trade supporters to save his Trans Pacific Partnership agreement, which House Democrats already balked at in a vote last week. The trade bill’s backers may now look to separate a controversial measure handing the president fast-track negotiating powers from the worker assistance program that the Dems voted down to block the fast-track provision. The workers program could then be attached a different, less controversial trade bill and both measures would likely eventually win passage.
• Tesla’s new weapon
Tesla Motors recently signed an exclusive partnership with Jeff Dahn, a leading lithium-ion battery researcher who is working on a project to develop longer-lasting, cheaper lithium-ion battery cells. It’s a difficult assignment, but one that could help lower costs for Elon Musk’s company in its quest to build a cheaper mass market electric car.