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WeWork Gets a Visit from Financial Reality

bloomberg.com

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Re: WeWork Gets a Visit from Financial Reality

#341

Post by Traster »

simias wrote: post #116
Traster wrote: post #4

>The Gulf investors backing the Vision Fund seem to have decided that WeWork is not a tech bet but simply an aggressive punt on real estate. This is the bogey man of a huge number of current 'tech startups' - What if it turns out Tesla really are a car company! Or if We Work are actually an office rental company! OR gasp Uber is a cab company! (1) We now have a glut of companies operating in traditional markets that…

>Not only this, but WeWork are going to learn about the cyclical nature of office rental revenue. I don't know anything about office rental so I'm curious, what makes it cyclical? You also seem to imply that we're high on the cycle (otherwise it wouldn't be a problem for WeWork in the future), why do you think that?

Office rental costs are basically highly correlated with the business cycle, when we're late in the business cycle there's lots of companies doing well, so they're hiring people so they're expanding so they need more office space. We can see that's true due to the low unemployment rate. This drives prices up. Because WeWork's business model is primarily to offer short-term flexible agreements their business is doing great now.

The problem is that WeWork is agreeing long-term agreements (5-10 years) with their suppliers. So when a recession happens unemployment will spike, businesses will close offices, consolidate to the low cost offices they own (which they can do really easily with their flexible agreements with WeWork) and WeWork is going to be left with lots of expensive offices that no one wants to use. That's one of the reasons their debt is so expensive.

Re: WeWork Gets a Visit from Financial Reality

#342

Post by mothsonasloth »

Anytime I've been to a WeWork, I have never seen much work being done.

Common themes I've seen are, some hipster Instagram'ing their overpriced avo and toast, a bunch of cute dogs running around mad distracting everyone, people browsing social media and someone messing around with the Sonos music player, setting the song to Rihanna's "Work" on repeat.

The WeWork camps look fun, if not a bit cultish.

caveat: these observations are from what I've seen in the shared spaces, I realise there are private offices and spaces where people will be working hard.

Re: WeWork Gets a Visit from Financial Reality

#343

Post by pjc50 »

PhantomGremlin wrote: post #321
pjc50 wrote: post #284

Earlier quoted context omitted.

It remains unlooted so far. It needs a layer of opaque billing, routinely bankrupting its customers, and profit extraction to match the healthcare industry.

It remains unlooted so far. On the contrary, public employee unions (including teachers) have done a masterful job of enriching themselves at public expense. E.g. Oregon: Member accounts saw appreciable and consistent growth during this time, but underlying pension assets did not grow to cover the increased benefit guarantee. Career public employees who worked from 1970 to 2000 often were entitled to retirement incom…

I find it hard to describe even 130% of average pay of $90k as "looting", on a website where most software developers wouldn't get out of bed for that kind of money.

I also find it very interesting that the 130% number on that wikipedia page comes from the only reference which is a youtube video by one "John Tapogna", who appears to be from a thinktank.

A different view: https://www.oregonafscme.org/?zone=/unionactive/view_article...

"the average PERS benefit to a retiree is $29,720 per year, or about $2,476 per month, which is a modest income, but it is being seeing as the problem. In the mean time, Comcast owes $170 million of unpaid taxes, Intel's off-shore profits were $26.9 billion, and "non-profit" hospitals made $1 billion in profits in 2015 - yes, you read it right, non-profits made a profit. " (I wonder why this more plausible number is so different to the Tapogna one?)

Re: WeWork Gets a Visit from Financial Reality

#344

Post by gota »

sbensu wrote: post #326
EthanHeilman wrote: post #256

Earlier quoted context omitted.

The dystopian novel "We" tells the story of a society which encompass all aspects of your life, in both physical and mental worlds. >"We is set in the future. D-503, a spacecraft engineer, lives in the One State, an urban nation constructed almost entirely of glass, which assists mass surveillance. The structure of the state is Panopticon-like, and life is scientifically managed F. W. Taylor-style." https://en.wikipe…

Wow, I thought you were making that up to fit the mood... until the Wikipedia article. This is bananas.

It is rare to find something too good to be true that is, indeed, true. I don't know why this amuses me so much.

Re: WeWork Gets a Visit from Financial Reality

#345

Post by jamisteven »

Dylan16807 wrote: post #272
barbecue_sauce wrote: post #245

Earlier quoted context omitted.

Only in the context of being a Britishism that Americans occasionally use.

> Only Nope. Never in my life heard of it being a britishism. Edit: A downvote for proving an absolute statement wrong? "Bloody" is used as a britishism. "Wee" is not, at least in many areas.

Have lived all over the US, "wee" is most definitely used.

Re: WeWork Gets a Visit from Financial Reality

#347

Post by robryan »

rmah wrote: post #163
Spivak wrote: post #138

Earlier quoted context omitted.

I mean half a million drivers each with a car that say costs $20k over its lifetime is about 10 billion. So like maybe?

500,000 drivers * $20,000/car => $10,000,000,000 or $10 bil, not $10 trillion. Thus far, Uber has raised $24.2 bil in financing so they could have bought cars for every driver easily. No idea what they did with all that money.

Subsidized fares.

Re: WeWork Gets a Visit from Financial Reality

#348

Post by golergka »

toddmorey wrote: post #213
EliRivers wrote: post #164

Earlier quoted context omitted.

a still evolving business that currently includes an elementary school and a coding academy. Education is like catnip to these people. It's like some kind of attractor industry. They're all convinced they have the magic formula.

To be fair, education in the US is very broken.

I don't know a single country where it isn't. Modern education paradigm is broken.

Re: WeWork Gets a Visit from Financial Reality

#349

Post by ajdegol »

kgwgk wrote: post #93

https://www.bloomberg.com/opinion/articles/2019-01-08/wework... "In addition to the corporate finance weirdness: “Going forward, the company will no longer be called WeWork but rather The We Company.” (“The switch is not a legal name change,” okay.) And: “Rather than just renting desks, the company aims to encompass all aspects of people’s lives, in both physical and digital worlds,” which is—and I have spent years w…

WeWee - toilet services.

Re: WeWork Gets a Visit from Financial Reality

#350

Post by profalseidol »

kgwgk wrote: post #93

https://www.bloomberg.com/opinion/articles/2019-01-08/wework... "In addition to the corporate finance weirdness: “Going forward, the company will no longer be called WeWork but rather The We Company.” (“The switch is not a legal name change,” okay.) And: “Rather than just renting desks, the company aims to encompass all aspects of people’s lives, in both physical and digital worlds,” which is—and I have spent years w…

I've heard there are companies that you can pay to visit your parents in the Retirement homes.

The moment we stopped working at the fields was the moment we had to stop the profit business. We should instead put in efforts into projects like CERN or anything that actually helps us improve the lives for as many as possible.

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