WeWork IPO 🏢

It’s a catch 22 for them, isn’t it?

They are burning money like crazy, so they need to raise.

However, it seems that the market is catching on and that the valuation is starting to resemble the value of their bricks and mortar, rather than all the hype and hot air surrounding it.

Looks like they are more being value like a property company.

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I had no idea that they were trying to get into providing residential accommodation too. I’m not surprised that they’re struggling, they need to make their core business work first and although there’s obviously some similarities, being good at managing office space doesn’t automatically make you good at accommodation.

I’d be curious to see their flats, although I’m not sure I’d want to live somewhere that reminded me of my office. Here’s the website.

It sounds like this market for temporary accommodation’s getting quite competitive in the US but I haven’t heard of similar providers in the UK :thinking:

It sounds a bit like The Collective in London.
https://www.thecollective.com/

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Thanks, they’re definitely selling the lifestyle - check out the 'day in the life at The Collective section of the website - but it looks a bit like student accommodation to me :sweat_smile:

Which is not so bad if you’ve just left university of course!

They also have a ‘charismatic founder’ and $400m in the bank so they could be one to watch.

That table at the end is one of the most depressing things I’ve seen.

2 neighbours squashed together at the end of a corridor, with no elbow room, staring at a blank wall, not speaking to each other

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It’s how critics described it: perpetual student living. Seems like urban hell to me.

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Here’s a profile of the CEO, which digs into his personality some more -

It also mentions this though, which seems pretty important -

Mr. Neumann has borrowed more than $740 million against his stock and has sold multiple hundred million dollars of shares, people familiar with those sales say, eliciting widespread criticism from analysts and Silicon Valley investors. These share sales weren’t disclosed in the IPO prospectus.

& also

In a 2015 investment round, Mr. Neumann sold tens of millions of dollars of shares. Soon after, the company launched a buyback program offering to purchase employees’ shares too. But the company gave employees a different arrangement, giving them a payout per share worth substantially less than what Mr. Neumann was paid, people familiar with the sale said. Mr. Neumann’s sale wasn’t publicized within the company.

We executives have said the buyback price couldn’t be higher for tax reasons. More recent stock sales have been more equitable.

emphasis mine

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Well once he gets to be president of the world he can hide all that bad news

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Yeah, I don’t know about the guy. Musk can be seen as a maverick, but he is also a genius in what he does. This guy seems to be both a maverick and a loose cannon.

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It seems scary for him to be getting away with this. Could be the next Revolut/Uber in terms of a ticking time bomb around negligence.

Ignorance of the law is not innocence of it! :police_car:

The last few days more and more is coming out about the founders, his wife and co-founder has just as much to worry about. I wonder what would have happened if they pushed ahead with the IPO and then all of this history starting coming out the woodwork.

Will they be able to IPO with the current exec structure or will a change be forced by one of the VCs?

It’s not a company I have any interest in investing into but the insight into what is going on behind the scenes is absolutely gripping! :popcorn:

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I’m generally a big believer in founder led companies and helping founders develop into CEOs, as their company scales, rather than replacing them with a ‘corporate CEO’. But in this instance, I wonder if Neumann’s usefulness is spent now and how much of a loss it’d be if he was replaced.

As the WSJ story says, his charisma and grand vision were big assets when raising money from private investors. But now that the market’s getting access to the reality, it’s obviously wearing thin. And if you don’t believe that WeWork really is a tech company that’s doing something truly innovative and it’s a property business instead, then presumably there’s a lot more people who could take over and run the the company well.

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It’s taken a while but now attention has turned to SoftBank :popcorn:

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Someone posted a pretty brutal takedown of WeWork yesterday, which has been doing the rounds on social media -

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I don’t think the author is a fan

If even half of that is true, it’s pretty damning

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The fact there are no other posts and this is just one random article, it’s clearly by someone who needs to get something off their chest or a Whistleblower of some kind.

Either way, to @meta’s point, even if half of this is true it’s a very scary prospect for what happens next.

The pressure is on for the IPO to happen before the end of the year.

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What I was not aware of was the level of accounting manipulations in their income statement is quite astonishing

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Find the hottest sector, and if you don’t have the insight, IP, genius, capital, code, skills, human capital, or a clue, then just borrow the words.

It’s beginning to smell like malfeasance at We. The lines between vision, bullsh*t, and fraud have been crossed here

Here we go.

And SoftBank are onboard..

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That was quick -

The NY Times are saying he is stepping down but their paywall’s even more aggressive than the WSJ’s so I haven’t managed to read the story -

WeWork’s Adam Neumann to step down as chief executive - FT

Edit - non-paywalled version of the story.

I’m struggling to remember a more disastrous IPO, particularly for a CEO but for the company and it’s investors too.

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