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According to Wikipedia One WTC cost 3,9 billion USD to build. It's 325,279 m2 floor area, or 12 000 USD/m2. WeWork claims 3,7 million m2 office space and a 47 billion USD "valuation", or 12 700 USD/m2. So the valuation of WeWork per square metre they rent , is about the same as the cost of One WTC per square metre ... https://www.sec.gov/Archives/edgar/data/1533523/000119312519...
Yet, we know that on IPO day both retail and institutional investors are going to ignore all these red flags and still buy, and the company is still going to be valued at $40-$50 billion. Why is that? Why doesn't everyone just stay away?
Earlier quoted context omitted.
If I wrote a program that solves a problem for my employer, then turned around and tried to sell it to them or get royalties from them, it would be a huge conflict of interest, I’d likely get fired, and they’d take it from me anyway due to standard tech company IP reassignment clauses. But if I’m the CEO i guess it’s totally fine.
Surprise! It turns out that although we employees are fêted as "Masters of the Tech Universe," Adam is a member of the Owner Class, and we are members of the Worker Class, and the two classes play by different rules. The first of such rules is that Owners make the rules, and consequently those rules benefit Owners over Workers. I'm ok with that, obviously, but being ok with something is not the same thing as being bl…
why?
If you want to expand this greed-driven view to how absolutely whacky and double dealing this IPO is going to be add in the following: 1) If WeWork does NOT raise at least $3billion in this IPO they will be in default of a contingency with lenders that will WITHHOLD a committed $6billion credit line. (a) 2) This at first glance sounds sage, keeps the bankers honest in pushing the IPO right? When in fact the lending b…
Some's going to have to pay for those expensive buildings, bonuses, suits and perks.
According to Wikipedia One WTC cost 3,9 billion USD to build. It's 325,279 m2 floor area, or 12 000 USD/m2. WeWork claims 3,7 million m2 office space and a 47 billion USD "valuation", or 12 700 USD/m2. So the valuation of WeWork per square metre they rent , is about the same as the cost of One WTC per square metre ... https://www.sec.gov/Archives/edgar/data/1533523/000119312519...
That's apple to oranges though. What does it cost to rent office space at 1WTC?
https://www.rentnyoffice.com/one-world-trade-center-office-s...
My point is that short term lease contracts are less valuable than the thing you lease otherwise there is no point in leasing. A silly comparison for a silly valuation.
According to Wikipedia One WTC cost 3,9 billion USD to build. It's 325,279 m2 floor area, or 12 000 USD/m2. WeWork claims 3,7 million m2 office space and a 47 billion USD "valuation", or 12 700 USD/m2. So the valuation of WeWork per square metre they rent , is about the same as the cost of One WTC per square metre ... https://www.sec.gov/Archives/edgar/data/1533523/000119312519...
There is nothing in your statement above that seems remotely surprising to me. Now, I'm extremely bearish about WeWork, and their financials (not to mention their governance) look horrible at least from my layman's eye, but you seem to be arguing above that WeWork is overvalued based on the comparison to a real, physical asset. If there is anything the Internet has shown, it is (unfortunately, IMO) that all the money…
1. Find a market that has no way of shrinking and where small and big money is being made.
2. Launch an app that you can market as a product, but that makes money from providing a service to small and big money business.
3. Profit.
Here's something I don't understand - the overwhelming consensus among analysts, newspapers/websites, blogs, internet commenters etc. seems to be that this company is overvalued and not worth even close to what they want to IPO at. It is not close to profitability and may never be. Not to mention all the borderline scams and shady dealings the company and CEO is involved in. Yet, we know that on IPO day both retail a…
1) That the consensus is wrong and this is an amazing, misunderstood business. Stratechery has the most balanced view IMO of this possibility - https://stratechery.com/company/wework/ - in this case you will likely be able to value buy the stock and hold for long term gain.
2) That the bankers selling to retail & institutional investors have a giant, incumbent incentive tied to IPO fees, debt origination fees, and of course actual debt repayment. As a result they are going to sell the WeWork stock and because what's good for the goose is good for the gander. If this is the accurate case WeWork will likely achieve their IPO guidance and be a good long term short.
So is this a thing now? That all new high-valuation tech companies of the last generation (Uber, "We") have to have some shady founder/CEO thing going on?
I doubt the amount of shady CEOs is any worse than it was at times in the past (the 80s being known for the "Gordon Gekko" type CEOs immediately come to mind). I think it just feels like there's more corruption because of a combination of us consuming more media, quicker and recency bias.
When things swing the other way, and not as much money is floating around waiting to be invested, investors will be able to hold the investees to higher standards.
Here's something I don't understand - the overwhelming consensus among analysts, newspapers/websites, blogs, internet commenters etc. seems to be that this company is overvalued and not worth even close to what they want to IPO at. It is not close to profitability and may never be. Not to mention all the borderline scams and shady dealings the company and CEO is involved in. Yet, we know that on IPO day both retail a…
Do we know that? I'm just over here eating popcorn.
While I do agree with what you believe is the "overwhelming consensus", there are legitimate reasons to think WeWork is bullish too. Here's an article I think does a good job representing both beliefs: https://fortune.com/2019/09/01/wework-ipo-stock-should-i-buy...