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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

#101

Post by chris11 »

bksenior wrote: post #96
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…

yea, no. It's simply an overpriced asset and the market is concerned that without an adjustment there isnt much room to grow in value. I dont think anyone think WeWork is not a strong business model. Id even take it one step further in that it's not the cash burn thats really killing people, it's the valuation. I know theyre connected as a larger company should hypothetically be able to sell less of itself for more m…

I'm not sure that WeWork has a strong business model. WeWork is absorbing the financial liability of signing long-term leases, and not passing that risk onto their customers. So financial discipline is critical to their business plan. Customer growth without financial discipline will just increase those liabilities.

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

#102

Post by jvagner »

ofibrvev wrote: post #57
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…

> 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 W…

Regus may be huge, but they're generally not listed in any of the coworking space directories I've been checking.

I know they're in my city, but the website location quotes daily prices based on a 24-month commitment.

Either they don't feel threatened by WeWork and independent coworking spaces, or they don't feel the need to adjust their terms and contract conditions... which I find curious.

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

#103

Post by forgotmypw »

I think what people overlook is that WeWork is more than a company or a coworking space.

WeWork is carving out a new nation, with its own space and rules, from right inside an existing one.

And its citizens are from one of the productive and capable segments of the population: tech workers and entrepreneurs.

If they can get past growing pains, I foresee WeWork becoming a superpower.

Hopefully, their human-owned nature will keep them on the good path.

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

#104

Post by bobbyi_settv »

mrweasel wrote: post #63
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…

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.

The basis for investing should be connecting companies that actually need money with the money they need.

If a company is already making enough money to fund its whole operations plus make a profit that it can use to grow, and it isn't trying to massively grow at all costs, then it has no reason to sell itself to an outside party for an injection of cash

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

#105

Post by TylerE »

bduerst wrote: post #67
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…

That's survivor bias though, isn't it? There are a ton of bad ideas and companies that sink all the time. WeWork isn't new or unique in this regard, for reasons you described. Just because you see a boat sink doesn't mean the other floating boats are going to start sinking as well.

WeWork is VERY big though.

For instance, their market cap is 1.5x what Kodak peaked at.

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

#106

Post by ghaff »

owenmarshall wrote: post #73
mtkd wrote: post #58

Earlier quoted context omitted.

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…

The elasticity is nice, sure, but in a contraction wouldn't we see less startups needing office space overall? If the economy is in the toilet it's hard to get funding to pay someone for office space to hold your startup that you can't fund.

And to the degree that We Work gets used as a "working from home" option, I expect that in any sort of crunch, many of those people will be told to just, you know, "work from home" and rent conference room facilities etc. on a daily basis as needed.

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

#107

Post by sjtindell »

nabdab wrote: post #91
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…

Framing the entire market as “either you buy into this single obvious scam or everything falls apart” is extreme. WeWork has been a gamble throughout, and the latest antics just pushed investors from “yes its a bad investment long term but short term I’ll make a profit” into straight up “this bag is on fire and I’m sure it’s filled with shit so I’ll let someone else step on it”. Wework failing is not going to trigger…

For me as occasional observer, the first shot across the bow was the Uber S1. It seems to have made a lot of people pause and question the business models of other companies as well. Nobody jumping ship, but caution in the winds.

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

#108

Post by aloknnikhil »

aeorgnoieang wrote: post #76
aloknnikhil wrote: post #68

Earlier quoted context omitted.

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.…

Huh? If investors demand immediately profitability, wouldn't that push companies to "fail fast" even more? The point of failing fast is to spend as little time as possible working on the wrong ideas, i.e. to find 'market fit' as soon as possible. Time spent designing and architecting isn't free either and, for a lot of people, 'implementing' is the only viable means of testing designs and architecture, and more impor…

> Time spent designing and architecting isn't free either and, for a lot of people, 'implementing' is the only viable means of testing designs and architecture, and more importantly whether there are any (potential) customers.

That's exactly the problem I see. We're going about it backwards. Shouldn't you start something because you have a customer need and not start something and then find a customer?

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

#109

Post by hari_seldon_ »

TylerE wrote: post #105
bduerst wrote: post #67

Earlier quoted context omitted.

That's survivor bias though, isn't it? There are a ton of bad ideas and companies that sink all the time. WeWork isn't new or unique in this regard, for reasons you described. Just because you see a boat sink doesn't mean the other floating boats are going to start sinking as well.

WeWork is VERY big though. For instance, their market cap is 1.5x what Kodak peaked at.

Which market cap? The one that was set by investors during the last round and has already been more than halved?

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

#110

Post by bduerst »

TylerE wrote: post #105
bduerst wrote: post #67

Earlier quoted context omitted.

That's survivor bias though, isn't it? There are a ton of bad ideas and companies that sink all the time. WeWork isn't new or unique in this regard, for reasons you described. Just because you see a boat sink doesn't mean the other floating boats are going to start sinking as well.

WeWork is VERY big though. For instance, their market cap is 1.5x what Kodak peaked at.

>market cap

You mean their private unicorn valuation? Kodak is publicly traded, WeWork is not, so you can't compare them. WeWork isn't that different from most failing unicorns.

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