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WeWork Bonds Drop Below Par for First Time Since IPO Filing

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Re: WeWork Bonds Drop Below Par for First Time Since IPO Filing

#51

Post by rchaud »

cs702 wrote: post #37

It's remarkably easy to make fun of WeWork, given the company's high-as-a-kite ambitions, its largely conjectural business model, its dependence on fresh capital for survival, its charismatic CEO’s new-age antics, and its disregard for conventional norms of ethical corporate behavior.[a] But if the IPO of a company as prominent as WeWork fails and the company is unable to raise the fresh capital it needs to stay aflo…

I'd take that as a signal that VCs need to do a better job of evaluating their bets. If a company make gargantuan losses year upon year despite getting billions in funding, the secondary markets don't have any obligation to bail out the CEO and his VC benefactors.

Re: WeWork Bonds Drop Below Par for First Time Since IPO Filing

#52

Post by hobofan »

chadash wrote: post #14
duxup wrote: post #4

It just seems like WeWork took an existing business model of renting office space, went all VC and gathered a bunch of money and sky high evaluation (toss in some creepy insider dealing) ... and ... that's it. I know there were some theories on cornering the market, or getting some sort of huge buy in / contracts with companies hiring remote workers but for the most part there's plenty of office space (at least in my…

> It just seems like WeWork took an existing business model of renting office space, went all VC and gathered a bunch of money and sky high evaluation (toss in some creepy insider dealing) ... and ... that's it. That is basically what they did, but they also marketed it really well and made the process seamless. Everyone points to Regus as an example of a company that already existed in WeWork's space, but as far as…

> But they certainly are the 900 pound gorilla in this space

They are very much not a 800 pound gorilla. That would mean that they could dictate the market, but with some of the most expensive prices for a mediocre offering in comparison to the competition, they can't really do that.

Re: WeWork Bonds Drop Below Par for First Time Since IPO Filing

#53

Post by cm2012 »

mytailorisrich wrote: post #17
chadash wrote: post #14

Earlier quoted context omitted.

> It just seems like WeWork took an existing business model of renting office space, went all VC and gathered a bunch of money and sky high evaluation (toss in some creepy insider dealing) ... and ... that's it. That is basically what they did, but they also marketed it really well and made the process seamless. Everyone points to Regus as an example of a company that already existed in WeWork's space, but as far as…

There's marketing and there's targeted marketing. All the people who need the services Regus provides know about Regus.

I googled WeWork when I needed space, but a Regus place popped up closer to me.

Re: WeWork Bonds Drop Below Par for First Time Since IPO Filing

#54

Post by goobynight »

mason55 wrote: post #40
duxup wrote: post #5

Earlier quoted context omitted.

I wonder what they sold their initial investors on? I've heard a lot of theories (cornering the market, the future of remote work) but I don't quite get what WeWork was selling folks on when it came to investing and evaluations that were so high in the first place.

My guess is that initially they focused on a market that was underserved by tech (short-term real estate). That by itself is probably enough to get some initial funding. Then you show that you're actually executing, at least as far as being able to grow and manage a real business with real revenues, which can easily get you another round. From there they did two things. The first was to start to securitize the busine…

The key here is that it success doesn't even have to be likely for VCs to jump in on something that everyone/everyone from a very large category (workers) might end up using e.g. Uber, WeWork, electric scooter sharing. That is, the demand is clearly already there. Rather than working from profit and trying to scale demand they are working on profitability of a huge market as the technical problem.

They have more money than investment targets, so they basically fund a few moonshot projects that look like they have a 1%+ chance rather than a 0% chance.

I suppose the thesis is that once one of these eventually wins, the losses on the rest will be more than recovered. You just have to do enough 1 out of 100 projects.

Re: WeWork Bonds Drop Below Par for First Time Since IPO Filing

#55

Post by spookthesunset »

cm2012 wrote: post #50
mlthoughts2018 wrote: post #45

Earlier quoted context omitted.

Don’t forget the weird cultish vibe of WeWork, like the forced summer camp, etc. This alone tells you something is very wrong.

They seriously had forced summer camps? WTF?

On mobile but look up their reviews in Glassdoor or indeed. All reviews are suspect individually but there is definitely quite a pattern.

Forced summer camp, nepotism, back stabbing politics, etc. Sounds like a hellish place to work.

Re: WeWork Bonds Drop Below Par for First Time Since IPO Filing

#57

Post by ofibrvev »

chadash wrote: post #14
duxup wrote: post #4

It just seems like WeWork took an existing business model of renting office space, went all VC and gathered a bunch of money and sky high evaluation (toss in some creepy insider dealing) ... and ... that's it. I know there were some theories on cornering the market, or getting some sort of huge buy in / contracts with companies hiring remote workers but for the most part there's plenty of office space (at least in my…

> It just seems like WeWork took an existing business model of renting office space, went all VC and gathered a bunch of money and sky high evaluation (toss in some creepy insider dealing) ... and ... that's it. That is basically what they did, but they also marketed it really well and made the process seamless. Everyone points to Regus as an example of a company that already existed in WeWork's space, but as far as…

> Before WeWork, most people weren't aware that coworking spaces were an option

Is this true? I am skeptical. If it is true it speaks to the mindboggling ignorance of Silicon Valley decision makers. I was living in a small (<500k metro not in california in 2009, and there were already 2 branded “coworking” businesses (that were well marketed to the tiny tech community). I may be the exception but I had not heard of WeWork until much later, but I wasn’t in a talent resource decision making position at the time, it wasn’t really my need to know those things. If it was and I didn’t, I would have fired myself for gross incompetence.

Re: WeWork Bonds Drop Below Par for First Time Since IPO Filing

#58

Post by mtkd »

duxup wrote: post #4

It just seems like WeWork took an existing business model of renting office space, went all VC and gathered a bunch of money and sky high evaluation (toss in some creepy insider dealing) ... and ... that's it. I know there were some theories on cornering the market, or getting some sort of huge buy in / contracts with companies hiring remote workers but for the most part there's plenty of office space (at least in my…

IPO valuation aside -- it is premature to write the WeWork model off

It could end up being a strong counter-cyclical model -- and outperforms as the economy tightens

Traditional office space is a 2, 5, 10 year commitment and a pain to move things around -- with WeWork you're paying monthly and relocating geographically is simple

CFOs will often look to pay more per month for shorter commitments which fit well with budgets and can be terminated quickly if situations change

WeWork also makes setting up an office in a new region super simple vs contracting with local landlords

Re: WeWork Bonds Drop Below Par for First Time Since IPO Filing

#59

Post by alistproducer2 »

cs702 wrote: post #37

It's remarkably easy to make fun of WeWork, given the company's high-as-a-kite ambitions, its largely conjectural business model, its dependence on fresh capital for survival, its charismatic CEO’s new-age antics, and its disregard for conventional norms of ethical corporate behavior.[a] But if the IPO of a company as prominent as WeWork fails and the company is unable to raise the fresh capital it needs to stay aflo…

I think it's important to not gloss over what the markets are looking for in companies they want to grow as fast as possible: monopoly.

IMO, the shift to "show me profits" could be as much about the growing societal and regulatory backlash to monopolistic tech, which, if materialized, drastically reduces the probability of achieving or maintaining monopoly.

Re: WeWork Bonds Drop Below Par for First Time Since IPO Filing

#60

Post by swoongoonz »

cm2012 wrote: post #50
mlthoughts2018 wrote: post #45

Earlier quoted context omitted.

Don’t forget the weird cultish vibe of WeWork, like the forced summer camp, etc. This alone tells you something is very wrong.

They seriously had forced summer camps? WTF?

it's not uncommon with hypey vc funded startups. I've gone to two different startup camps, it's very much so kool-aid drinking exercises
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