First time I hear about this company. Why is it related to HN?
Because it's a "tech" company...
The We Company S-1
41–50 of 346 posts
Re: The We Company S-1
#42Next Uber? Impressive growth, but their expenses grow at the same pace (they consistently need to spend ~$2 to earn $1). WeWork's locations are wonderful, but if they want to start making money, they need to start charging more or lower the costs. Won't people just move to cheaper offices then?
>WeWork's locations are wonderful
really had the opposite experience. To me they feel like a neural net went rogue and scanned through a billion pictures of "generic millenial apartment" and then turned it into workplaces. Every weworks place I've seen seems completely exchangeable and lacking any sort of character.
Re: The We Company S-1
#43Does 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.
The majority of businesses I have worked for, the company leases the building from another company owned by the founders.
Re: The We Company S-1
#44Does 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.
Then cashes out another $700m of investors cash pre-IPO probably to buy more properties, to lease back again...genius.
But yeah, red flag a mile wide.
Re: The We Company S-1
#45Earlier 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.
The retail margins are about the same as walmart. They don't have some magic sauce in selling things.
AWS is their real money maker.
Re: The We Company S-1
#46> 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.
Unfavorable opinion alert!
Lets say they were publicly traded, and not held for institutions, VCs, and fonders.
Would you as a person, buying Class B shares ever buy enough that the 20 votes per share matter? Why does the number of votes to you matter, unless you sank a few hundred million into the company (at which point, you would be an institution or vc), your votes wouldn't matter with any of the classes.
Re: The We Company S-1
#47Does 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.
Yes, under "related party transactions": https://www.sec.gov/Archives/edgar/data/1533523/000119312519...
"We are party to lease agreements for four commercial properties with landlord entities in which Adam has an ownership interest..."
Re: The We Company S-1
#48> 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.
Square was a $35B company 2 weeks ago before a disappointing earnings. Stock was up 9x from IPO less than 4 years ago. How is that disappointing? The stock tanked hard from the earnings so it’s a $26B company now with $60-62 stock price. Still much better than the $9 IPO price.
Google is the 4th biggest company in the world. Don’t need to even go there.
Snap growth was already stalling when they IPOed and then Facebook especially Instagram really went after them.
Re: The We Company S-1
#49Earlier 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.
> I would say those landlords are going to be in for an even bigger shock.
Not at all. We is a player in major markets that are populated by professional landlords that have been in this business for much longer than the founder of WeWorks has been alive and have seen it all before, dressed in different clothes. At the end of the day, the class A/B/C buildings as well as the lots they sit on and the air rights above them are real appreciating assets, while the tenants are just the revenue stream for opex.
Re: The We Company S-1
#50I’m really disgusted by how much recent tech IPOs inject pitch deck-style garbage into the S-1 filing, especially this one. I’ve always had a great amount of respect for the mediating nature of the S-1’s dry, candid, and ruthlessly honest assessment of business risks, and even though those things are still there, they’re blown out by marketing photos, full-page charts, and branding.
This is basically like putting perfume on a term paper. Regulators could do well to clamp down on this sort of activity, especially with the S-1’s reputation as a means to truly inform investors.