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The We Company S-1

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Re: The We Company S-1

#291

Post by mbesto »

hackerbabz wrote: post #36
phyalow wrote: post #20

Earlier quoted context omitted.

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.

No, it's not. Not at all. Cash flow for each of the companies is VERY different.

TESLA:

https://www.marketwatch.com/investing/stock/tsla/financials/...

Amazon:

https://www.marketwatch.com/investing/stock/amzn/financials/...

Re: The We Company S-1

#292

Post by mbesto »

sonofaplum wrote: post #267
short_sells_poo wrote: post #232

Earlier quoted context omitted.

Seems like they are pretty much levered to the hilt. What happens when the current bubble bursts (or even just deflates) and their occupancy rate declines? Their business model seems to be selling short term leases and buying long term leases. This is all fine and dandy as long as they can find enough buyers for the short term commitments, but the distribution of almost all such strategies tends to be heavily tailed.…

in a recession, is short term, flexible office space more or less desirable?

> short term, flexible office space more

This is more appealing to businesses who don't want large capital expenditures, which could or could not be related to a recession. It's more related to market trends and access to a lot of cheap capital.

Re: The We Company S-1

#293

Post by skewart »

arnvald wrote: post #30

Next 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

I strongly disagree. The ones I've been to are shoddily built and badly designed. Door handles break after a few months. There are gaps in walls between offices. And bathrooms have sinks that are borderline unusable because light fixtures are in the way. Sure, everything is new, so it feels kinda fresh and nice at a glance, but I can't imagine the spaces aging well. Or, they'll have to spend money overhauling the interiors every few years.

And that doesn't even touch on their branding and design choices, which, to me at least, don't even begin make up for the cheapo low-quality interiors.

Re: The We Company S-1

#294

Post by fastbeef »

Wheaties466 wrote: post #230
fastbeef wrote: post #213

Perhaps this is a stupid question, but is an S-1 the first chance for the general public to get any insight into a company’s financials?

Yes. https://en.wikipedia.org/wiki/Form_S-1

That’s so counterintuitive once you get used to all company returns (both privately and publicly held) being public information in Sweden.

Here’s Spotify’s complete financial history from its inception for example:

https://www.allabolag.se/5567037485/spotify-ab

Re: The We Company S-1

#296

Post by ohashi »

elliekelly wrote: post #131
ohashi wrote: post #106

Earlier quoted context omitted.

How is that going to fly with a public company?

Page 28 discusses it. They have an interesting approach to managing the conflict: > Pursuant to our related party transactions policy, all additional material related party transactions that we enter into require either (i) the unanimous consent of our audit committee or (ii) the approval of a majority of the members of our board of directors. I was pretty impressed when I read "unanimous consent of our audit committ…

That board position is the key problem. The conflict of interest isn't addressed at all.

Re: The We Company S-1

#297

Post by [deleted] »

JackFr wrote: post #256
maroonshifter wrote: post #211

Earlier quoted context omitted.

Yes I realized this, but this makes the word unnecessarily ambiguous and this new definition is the purely the result of enough people using the word incorrectly long enough. We don't mean "destroy 10%" when we use the word decimate anymore, I get it. Natural language, migration of meaning, subjective denotation etc.

Tell me about it. I spend tons of karma absorbing downvotes in a losing battle correcting 'enormity' and 'epicenter'

[deleted]

Re: The We Company S-1

#298

Post by jngreenlee »

AgloeDreams wrote: post #250
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…

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 enc…

I would also agree with you. They seem to have a focus on some top tier locations for their brand. IWG/Regus is not nearly so fancy...but they do have more locations, more suburban coverage, and usually in typical office parks. Which, FWIW, probably benefits a more money-ready segment of the population...middle class, middle aged, professional class.

Re: The We Company S-1

#299

Post by i_am_nomad »

fgonzag wrote: post #269
i_am_nomad wrote: post #149

Earlier quoted context omitted.

Or pull a Groupon and just completely redefine several accounting concepts, e.g. list marketing costs as capital expenditures.

I don't get that one. How are they justifying placing marketing as Capex instead of Opex? What is the advantage? Are they saying marketing is a depreciating asset?

IIRC, their argument is that marketing builds brand awareness, and brand awareness is a capital good.

Re: The We Company S-1

#300

Post by santiagogo »

danieltillett wrote: post #32
Bluecobra wrote: post #27

Earlier 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 know one landlord who rented several buildings to them and he understands the risks perfectly, but says the price per sq/ft he's getting paid is so good that even if they blow up within 3 years it's still a great deal.
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