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The We Company S-1

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Re: The We Company S-1

#241

Post by vkou »

ryaniscool wrote: post #35

According 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.

I don't wonder that, cash in today's climate is easy to get.

What I wonder is 'How spectacularly will their business implode if a recession starts?'

Re: The We Company S-1

#242

Post by kart23 »

mdszy wrote: post #18

That wegrow bit seems really strange and cultish with all the mentioning of "connecting with the universe" and "cosmic education".

What the actual heck. Why are startups trying to do schools now? There is no way I'm sending my kid to a company with shareholders. Oh, and it costs $30,000 for your 4 year old to attend preschool. Why must we 'disrupt' anything and everything?

https://wegrow.com/ https://wegrowparents.squarespace.com/

Re: The We Company S-1

#243

Post by dbuder »

xiphias2 wrote: post #165
dbuder wrote: post #37

I'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.

To me WeWork just looks like the stock market with leverage and extra management fees.

Well at least their management does something, REITs look like cushy ticket clippers to me (from the outside).

Re: The We Company S-1

#244

Post by _sword »

Wework disclosed in this S-1 that the vast majority of its members are small organizations or a handful of seats purchased by “enterprises.” In the event of an economic downturn I wouldn’t think WeWork could reasonably expect to collect on its membership fees no matter its contracts - their small clients will go out of business or otherwise just stop paying. WeWork is still on the hook for its contractual lease obligations, with lease terms averaging 15 years by its disclosures and between $2.3-$2.4bn of contractual obligations per year in upcoming years.

I don’t see this going well.

Re: The We Company S-1

#245

Post by ummonk »

Their operating expenses + depreciation seems to consistently be equal to their revenue, before the pre-opening expenses, sales and marketing expenses, and new market development expenses.

Investing in growth at a loss makes sense for such a rapidly growing company, but can they make the unit economics work to turn a profit (after covering general and administrative costs as well) when they need to? They do claim to be offering the ability to house employees at less than half the market rate for traditional leases + operations, so I guess they'd be able to raise prices to a more sustainable level when required, assuming those numbers are accurate.

As put off as I am by this whole company's branding and vibe, they do seem to have built a major business and likely have a substantial lead in the space due to brand recognition and operational experience.

Re: The We Company S-1

#246

Post by ex_ex_nihilo »

led76 wrote: post #218
TimPC wrote: post #209

Earlier quoted context omitted.

4.2M not 420M. 10% of 42M in options.

It's not $42M in options. It's 42M options, possibly valued at $110 each at the IPO. Hence $4B

That's not how option valuation works. They're worth the difference of their strike price to the price of the underlying intrinsically. So if his strike is $110 (which it's not for reasons others have pointed out - he was issued options on common stock), he gets the appreciation of the stock after IPO once he exercises. If the stock plummets after IPO, his options will expire worthless. Though they are probably LEAPs, and it's weird to denominate options per-share like that. Normally contracts are for 100 shares and it always confuses me the way companies award options.

Re: The We Company S-1

#248

Post by xeroaura »

joshgachnang wrote: post #227
jngreenlee wrote: post #210

Earlier quoted context omitted.

For actually useful comparisons, look at Regus/IWG which is larger and more profitable: https://en.m.wikipedia.org/wiki/IWG_plc I have used Regus on and off in the US for a decade. I also have a free WeWork subscription through my AMEX platinum (boosting numbers pre-IPO?). Regus is actually better run and more comfortable...just doesn't have the millenial loft vibe. I think that vibe is costing them too much for a re…

Woah, didn't realize Amex had that benefit. Looks like I'm signing up!

Looks to be business Amex Plat only for 1 year of free WeWork.

Re: The We Company S-1

#250

Post by AgloeDreams »

jngreenlee wrote: post #210
mmillin wrote: post #2

My 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…

For actually useful comparisons, look at Regus/IWG which is larger and more profitable: https://en.m.wikipedia.org/wiki/IWG_plc I have used Regus on and off in the US for a decade. I also have a free WeWork subscription through my AMEX platinum (boosting numbers pre-IPO?). Regus is actually better run and more comfortable...just doesn't have the millenial loft vibe. I think that vibe is costing them too much for a re…

See I always thought WeWork's issues were location related, that the real estate costs were just so massive. Just look at their NYC locations, they have the entirety of the top floor of the Fulton st station, it's gorgeous but seemingly very expensive to rent, I'm sure the crazy busy small Shake Shack downstairs makes a month's worth of the (Upstairs) WeWork's payments every week. But you're right, the other more enclosed locations (like 85 broad) are more comfortable too.
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