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The We Company S-1

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Re: The We Company S-1

#151

Post by erikig »

beager wrote: post #89
anilshanbhag wrote: post #62

Earlier quoted context omitted.

I for one think those photos / charts are important as otherwise you won't understand how big WeWork is. Couple of days ago I was casually checking Wework locations and was surprised that they have 24 locations in Beijing, 10 in Bangalore, 21 in Tokyo ! They are everywhere.

It’s trivial to convey that information in plain text

I don't think so - each of these locations are owned by joint venture subsidiaries (IndiaCo, JapanCo etc). Without a diagram like that on page 16, it would be near impossible for an investor to understand how their investment in the IPO relates to these subsidiaries.

Re: The We Company S-1

#152

Post by wpietri »

nabnob wrote: post #132
doppp wrote: post #33

Earlier quoted context omitted.

It's not a tech company, it's a property company with the valuation of a tech company.

It's a property company that's planning tracking everything people do in their buildings. >WeWork's latest acquisition is a small software company with 24 employees. Euclid is a spatial analytics platform...Euclid's website says the company is "focused on redefining the workplace experience of the future." Translation: optimizing every aspect of the physical workplace so workers are their most productive. Euclid does…

Yeah, I don't see that providing the outsized gains they're hoping for. I've talked to a number of entrepreneurs who business plan is basically

    1. Collect data
    2. ???
    3. Profit
And every time I quiz them on point 2, they get squirrely. They can never explain exactly how it works; at best I get hazy references to Google making lots from data, which is at best a partial truth.

In this case, I doubt having that data will do much; humans are already natural optimizers. Really, the things workplaces should be optimized for are unlikely to be easily measurable, so at best these systems will optimize for the wrong thing.

And really, the reason workplaces aren't particularly optimal now is that most decisions are made not for maximizing business value, but for maximizing the power and comfort of those high up. As an example, when businesses relocate their headquarters, it is generally to move closer to the CEO's home. Or we can look at all the decisions made to optimize a visible metric, like cost, to the harm of invisible ones. E.g., the open office plan, which is cheap and lets managers supervise by looking out their office window, but significantly harms productivity and employee happiness.

Re: The We Company S-1

#153

Post by calvinv »

jddj wrote: post #77
kgwgk wrote: post #22

“When applying our average revenue per WeWork membership for the six months ended June 30, 2019 to our potential member population of 149 million people in our existing 111 cities, we estimate an addressable market opportunity of $945 billion. Among our total potential member population of approximately 255 million people across our 280 target cities globally, we estimate an addressable market opportunity of $1.6 tri…

Is this how these things are usually calculated? Does a watch manufacturer say that there are approximately 255 million left arms which we can reach by post, and since our watches sell for $1000 that's a $255B opportunity?

any sane watch manufacturer would mention that people don't have a limit of owning one watch

Re: The We Company S-1

#154

Post by pharrington »

goatinaboat wrote: post #112
xiphias2 wrote: post #67

Earlier quoted context omitted.

Actually they don't have free lunch, which is quite strange for Silicon Valley companies

They (We) does have mandatory enforced veganism, however. https://www.bloomberg.com/news/articles/2018-07-13/wework-te...

The Bloomberg article preview describes enforced vegetarianism, not veganism.

Re: The We Company S-1

#155

Post by notyourday »

dctoedt wrote: post #139
beager wrote: post #50

I’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 per…

WeWork's litigation counsel might have wanted the pitch-deck stuff to go into the S-1 to make the information more understandable to non-business people. That way, the pitch deck would be an official part of the record; in turn, this would mean a couple of things: 1. If disgruntled investors were to sue WeWork, the pitch-deck material could be referred to by WeWork's counsel in tactical maneuvering such as a motion f…

Yeah, except that's not how this works outside the theoretical realm.

In practice, those that actually took companies public know that the more terrible crap you throw into the S-1 ( pitch deck included ) as long as you state that risk-wise you are probably a terrible investment for the public, the better protected you are from the lawsuits in the future when the public's investment does not pan out: you say 'we are doing X and this is our rosy pie in the sky pitch deck, but we must tell you the risk is that none of this is helping us to make money. Buyer beware'

Should one look at the S-1s of the tech companies that went public in last 4-5 years one would see that pattern

Source: Attorneys engaged by the investment banks to help companies to IPO.

Re: The We Company S-1

#156

Post by i_am_nomad »

sjtgraham wrote: post #34
i_am_nomad wrote: post #28

Does 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?

Because I just got fifty other smarter and better educated people to do it for me.

Re: The We Company S-1

#157

Post by mbesto »

bko wrote: post #98
doppp wrote: post #33

Earlier quoted context omitted.

It's not a tech company, it's a property company with the valuation of a tech company.

They're trying to sell it as tech > We have approximately 1,000 engineers, product designers and machine learning scientists that are dedicated to building, integrating and automating the complex systems we use to operate our business

One would think that if you have that much invested in engineering business operations that, ya know, your business operations would be profitable. This is the gamble and is based on a volume play, since technology that enables business operations can have tailwind effects.

Re: The We Company S-1

#159

Post by wpietri »

pge wrote: post #138
dynjo wrote: post #44

Earlier quoted context omitted.

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.

I agree with your larger point that his dealings are a huge red flag, but just to clarify, a bunch of that money was borrowing against his existing stock rather than actually selling to investors, which is quite different. Selling can imply a lack of confidence in future value, while borrowing against the stock implies some level of confidence.

When I was in financial trading, I think that's what we called a "Texas hedge".

(A hedge being where you take some of your money and buy protection against downside risk. For example, since I'm in tech, it's in my interest to sell some of my company stock and buy something that is uncorrelated with tech. That way if my company blows up, I won't be totally broke. The Texas hedge is doing the opposite, so that you're even more screwed if the bet doesn't go your way.)

This could indicate confidence, but it could also indicate a double-or-nothing mentality. You can only be so bankrupt, after all.

Re: The We Company S-1

#160

Post by quux »

goatinaboat wrote: post #112
xiphias2 wrote: post #67

Earlier quoted context omitted.

Actually they don't have free lunch, which is quite strange for Silicon Valley companies

They (We) does have mandatory enforced veganism, however. https://www.bloomberg.com/news/articles/2018-07-13/wework-te...

Actually it's pescatarianism, for whatever reason seafood doesn't count as meat.
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