You would literally have to be out of your mind to buy into this, especially as the founder cashed out $700 million right before IPO. Best. Short. Ever.
No, no. That's reserved for $BYND. This is a close second though.
The We Company S-1
31–40 of 346 posts
Re: The We Company S-1
#32You would literally have to be out of your mind to buy into this, especially as the founder cashed out $700 million right before IPO. Best. Short. Ever.
They are going to be screwed when there’s another recession, given that they don’t actually own the office space they rent out. This is a real gem: “Substantially all of our leases with our landlords are for terms that are significantly longer than the terms of our membership agreements with our members. The average length of the initial term of our U.S. leases is approximately 15 years, and our future undiscounted m…
I would say those landlords are going to be in for an even bigger shock.
Re: The We Company S-1
#33My favorite part of new tech company filings is looking at the risk section and finding something to the effect of: "We are not profitable, and may never be." > We have a history of losses and, especially if we continue to grow at an accelerated rate, we may be unable to achieve profitability at a company level (as determined in accordance with GAAP) for the foreseeable future. I understand the reasoning behind havin…
It's not a tech company, it's a property company with the valuation of a tech company.
Re: The We Company S-1
#34Does the S-1 disclose the fact that the founder is also one of the company’s biggest business partners? He buys up properties and then leases them to WeWork. Seems like a red flag to me.
Why don't you read it and find out?
Re: The We Company S-1
#35According to the prospectus, they lose so much money because they are building out new locations. Their break even point takes about a year for an individual location.
So theoretically, they have a path to profitability. I just wonder where they get the cash in the meantime. >$1B/year burn rate, ouch.
Re: The We Company S-1
#36Earlier quoted context omitted.
Profitability and the value of the equity aren't necessarily related, though. Amazon was unprofitable for many years, but its stock still increased in value.
Thats because Amazon was only unprofitable due to Capex and R&D. Their operating margin is fantastic, it was this promise that enticed investors! WeWork on the other hand is very ugly.
This is what seems to not be understood by a lot of investors and people commenting on investments. Amazon could have turned a profit years earlier if they wanted to. Instead it made more sense to continue spending all of their money on expansion and R&D.
It's the same with Tesla. They are selling a shit ton of cars at good markup. If they wanted a profit, they could have one. They just don't want one right now.
Re: The We Company S-1
#37I've disliked WeWork from the beginning, it pretends to be a tech company but it's just an old school real estate play. I still wouldn't short it, especially early on.
Re: The We Company S-1
#38> We have 3 classes of stock: Class A shares which have 1 vote, class B shares, which have 20 votes, and class C shares which have 20 votes. All classes vote alongside each other. I wouldn’t consider being an investor in this company unless class B or C shares are publicly traded. Just look at the underperformance of GOOGL, SNAP, and SQ for reasons why not to be an investor here.
GOOGL has voting rights versus GOOG. There hasn't been a large performance difference though. IAC vs. MTCH, FB, Nike, Berkshire, and Regeneron all have done well though long-term with dual share classes as contra examples. Founder led companies typically out-perform the market. In WeWork's case though, we've seen huge governance red flags already though, so I am not saying voting rights don't matter. If the management is aligned with the long-term vision (not selling $700M before the IPO), they typically matter less.
Re: The We Company S-1
#39According to the prospectus, they lose so much money because they are building out new locations. Their break even point takes about a year for an individual location. So theoretically, they have a path to profitability. I just wonder where they get the cash in the meantime. >$1B/year burn rate, ouch.
Wouldn’t it be from the IPO? If they sell 10% of the company, it should raise billions.
Re: The We Company S-1
#40Earlier quoted context omitted.
They are going to be screwed when there’s another recession, given that they don’t actually own the office space they rent out. This is a real gem: “Substantially all of our leases with our landlords are for terms that are significantly longer than the terms of our membership agreements with our members. The average length of the initial term of our U.S. leases is approximately 15 years, and our future undiscounted m…
I would say those landlords are going to be in for an even bigger shock.
Apparently the CEO owns a bunch of the places and leases them to the company.