Excess Returns · Saturday, June 27, 2026
Chris Mayer discussed how companies can become 'cheaper' not only through a decrease in stock price but also through accelerated growth in earnings and revenue. He cited Airbnb as an example where, despite stock price stagnation, its increasing earnings made it cheaper over time.
“So, yeah, you know, basically, a company could lose a bunch of its value in price, and now be cheaper, or earnings, revenue, whatever could actually accelerate and it could get cheaper that way without responding.”
“So, yeah, sometimes, you know, a company like, uh, I know Airbnb when it went public was that, you know, again, big premium and even though the business did very well over time, stock prices had gone anywhere, but the stock has gotten cheaper and cheaper and cheaper every year as earnings and cash flows continue to grow and expand.”