WeWork Bonds Drop Below Par for First Time Since IPO Filing

Post by notahacker » Tue, Sep 10, 2019, 4:15 PM UTC

mtkd wrote: post #58

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 bu…

Post by beager » Tue, Sep 10, 2019, 4:20 PM UTC

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…

Post by aeorgnoieang » Tue, Sep 10, 2019, 4:31 PM UTC

aloknnikhil wrote: post #68

mrweasel wrote: post #63

Earlier quoted context omitted.

Shouldn’t “show me the profit” have been the basis for investing all the time? It’s the growth at all cost that’s dangerous.

Agreed. Grow at all costs is what incubates the "fail fast" approach, which I, personally, disagree with. There's a reason why you need to spend most of your time designing and architecting and jump to implementation only when the viability of the solution has been justified. And part of this justification has to be a solid business model that has a clear road to profits. And a path to profit that's not decades away.…

Post by aeorgnoieang » Tue, Sep 10, 2019, 4:40 PM UTC

zpwm wrote: post #34

whatshisface wrote: post #30

Earlier quoted context omitted.

That's a good point, but I think you can get one-year bonds with an annual coupon: that means you get one payment a year from now. So bonds in general aren't IOUs, but there is at least one bond that works like one.

You are right that would be an example of a bond/bill with a 0% coupon rate. There are still weird negative interest rate conditions where it makes sense to buy an IOU for more than you get back (not that I understand those conditions :) )

Post by mfoy_ » Tue, Sep 10, 2019, 4:44 PM UTC

beager wrote: post #74

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 don't know, by the time you get to a series G, "show me the profits" is a fair demand that the capital markets should never not be making. Your post seems to say "if you don't prop up WeWork, good luck raising money for your startup." I think it's a little disingenuous to project that guilt onto startups that are in reasonable early and growth stages. Every company has a viable plan for survival by that stage. And…