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Some WeWork Board Members Seek to Remove Adam Neumann as CEO

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Re: Some WeWork Board Members Seek to Remove Adam Neumann as CEO

#151

Post by DebtDeflation »

MobileVet wrote: post #23

With $700M extracted and long term leases to the company for properties that he owns... One could easily ride off into the sunset. It will be interesting, and insightful, to see if that is the tact he takes. If he does... It will add credibility to the already strong case for this being deliberate deceit versus unchecked ignorant hubris.

>With $700M extracted

The $700M figure is a combination of equity sold outright and loans taken out using the equity as collateral. I have not seen any breakdown of how much falls in each category. I would not be surprised to see those loans get called in soon given the current situation and the recent governance change requiring him to pay back any profits he makes on leasing those properties to We.

Re: Some WeWork Board Members Seek to Remove Adam Neumann as CEO

#152

Post by semi-extrinsic »

notyourday wrote: post #129
BubRoss wrote: post #90

Earlier quoted context omitted.

The shares with no voting power would still be converted in the case of a buyout of a company though, right?

It is also a lot more complicated than that. With a single class of shares every shareholder interest is aligned. It is not possible to create a subclass of shareholders among the existing shareholders without existing shareholders agreeing to it. So in a buyout all shares are equal and will receive and equal percentage of distribution of all assets regardless of how those assets are structured. The moment there are…

Excellent comment. Nitpick: it's "jockeying for position", as in, what the jockeys do during a horse race to get in a better position so they can win.

Re: Some WeWork Board Members Seek to Remove Adam Neumann as CEO

#153

Post by cpeterso »

benjaminbrodie2 wrote: post #109
iamleppert wrote: post #40

What kind of company that is controlled by a single man insists on branding itself as “we”? Even the name of the company is a bold-faced lie.

How should wework be pronounced? I always pronounce it like I'm stating a fact (that we do in fact work)

"Whey Orc"

Re: Some WeWork Board Members Seek to Remove Adam Neumann as CEO

#154

Post by hbbio »

chrisseaton wrote: post #145
hbbio wrote: post #100

Earlier quoted context omitted.

There is clearly a market for WeWork... and many competitors. WeWork is and will be a great company, no matter what. WeWork main competitor is Regus, founded in 1989. Regus is now present worldwide with revenues of 2.535 billion GBP (2018). Their market cap is a mere 3.68 billion! There are also tons of smaller companies in that sector which are not international (mostly 1/2 countries) with much lower valuations. So,…

Have you ever been in a Regus office? They're horrible spaces. They don't get it . WeWork is a lot nicer. That's why they're worth a lot more.

Yes, I did rent an office from Regus a few years ago... and it did look horrible!

But for the difference in valuation, that's an easy thing to do in a LBO: Hire a Chief Design Officer!

Thanks to WeWork maybe, their new offices are better: https://www.regus.co.uk/offices/united-kingdom/county-edinbu...

Re: Some WeWork Board Members Seek to Remove Adam Neumann as CEO

#155

Post by notyourday »

semi-extrinsic wrote: post #152
notyourday wrote: post #129

Earlier quoted context omitted.

It is also a lot more complicated than that. With a single class of shares every shareholder interest is aligned. It is not possible to create a subclass of shareholders among the existing shareholders without existing shareholders agreeing to it. So in a buyout all shares are equal and will receive and equal percentage of distribution of all assets regardless of how those assets are structured. The moment there are…

Excellent comment. Nitpick: it's "jockeying for position", as in, what the jockeys do during a horse race to get in a better position so they can win.

Thanks for the correction. I totally suck at noticing misspellings on a phone and beat myself up afterwards.

Re: Some WeWork Board Members Seek to Remove Adam Neumann as CEO

#156

Post by hn_throwaway_99 »

wpietri wrote: post #80
thedogeye wrote: post #53

WeWork is a useful product. Office real estate is broken for startups. Landlords make us take 5-10 year leases when startup planning horizons are almost never longer than 18 months. WeWork earning 30-40% margins by allowing us to take shorter terms that better fit our needs. Should be a good business.

Right, that's the theory, which is how they got this far. But that's not a new thing; companies have been in the same business for years. WeWork's valuation is wildly out of proportion to its competitors. WeWork probably does have an advantage specifically for tech startups. But startups are definitionally not a large market, nor are they generally a good one. When we're small, we're cheapskates. And then we pretty q…

> But that's not a new thing; companies have been in the same business for years. WeWork's valuation is wildly out of proportion to its competitors.

I take issue with the "people have been doing the same thing for years" take, when most hugely successful start-ups tend to be small tweaks on established ideas. Take AirBnB. Peer-to-peer short term rentals existed on the Internet in the form of sites like VRBO since the late 90s, but AirBnB's relatively small changes (mainly ensuring that the financial transaction occurred completely on their platform) allowed for the sea change of urban short term rentals.

While I'm bearish on WeWork for the same reasons as many other people, I think there is certainly room for a consolidated business of month-to-month office rentals that offers a branded experience.

Re: Some WeWork Board Members Seek to Remove Adam Neumann as CEO

#157

Post by kamyarg »

Dunedan wrote: post #82
goatinaboat wrote: post #56

Earlier quoted context omitted.

If you declare your company has a billion shares and I buy 1 for $1 then you have a valuation of... one BILLION dollars. If I later buy 1 share for $2 then your valuation has doubled. That is basically SoftBank’s business model.

Basecamp even made a headline out of it a while ago: https://www.linkedin.com/pulse/basecamp-valuation-tops-100-b...

> Basecamp is now a $100 billion dollar company, according to a group of investors who

> have agreed to purchase 0.000000001% of the company in exchange for $1.

Just wow, this is gold.

Re: Some WeWork Board Members Seek to Remove Adam Neumann as CEO

#158

Post by rightbyte »

gbear605 wrote: post #125
krisoft wrote: post #61

Earlier quoted context omitted.

> But since We is a real business with real users and a successful one, We can't just coast on its cash. We have a very different definition of what does it mean to be a successful business.

It's successful in the sense that it could raise prices to make a profit and there's a possibility that it would still have enough customers left. Unlikely the oft-discussed "selling dollars bills for 90 cents" companies, WeWork is creating real value that its customers will pay for. The question is still open whether that value is more than the operating costs, but it's at least possible. I'd bet against it though.

Uber is also creating real value for its customers.

Re: Some WeWork Board Members Seek to Remove Adam Neumann as CEO

#159

Post by cure »

chrisseaton wrote: post #145
hbbio wrote: post #100

Earlier quoted context omitted.

There is clearly a market for WeWork... and many competitors. WeWork is and will be a great company, no matter what. WeWork main competitor is Regus, founded in 1989. Regus is now present worldwide with revenues of 2.535 billion GBP (2018). Their market cap is a mere 3.68 billion! There are also tons of smaller companies in that sector which are not international (mostly 1/2 countries) with much lower valuations. So,…

Have you ever been in a Regus office? They're horrible spaces. They don't get it . WeWork is a lot nicer. That's why they're worth a lot more.

Yeah. Regus offices are dreadfully bland. Also, they nickel and dime you for every little thing (you want an hour of wifi for that meeting room you booked? it's going to cost you...). Regus is also very expensive, as office space goes.

Re: Some WeWork Board Members Seek to Remove Adam Neumann as CEO

#160

Post by crb002 »

soniman wrote: post #130

This has all happened before. The proto-WeWork was called HQGlobal and the firm behind it was Frontline Capital. The whole thing unraveled in the 2000 bust as the tenants all went out of business and canceled their leases at the same time. WeWork is not going to be pretty when the economy turns. Bill Ackman backed Frontline Capital and it pretty much sunk his first hedge fund, Gotham Capital.

It can work, but they need more anchors. Stripe, Gitlab, ... companies that are remote but have workers prefer to cowork. Economic downturn might actually help them if they can gobble long term low leases. More unemployed also means more consumer base outside big corporate America. Their biggest threat is small mom and pop coworking spaces like Gravitate in DSM. Geoff wouldn't sell for less than a massive premium, and nobody is going for WeWorks bad service if they tried to compete.
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