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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

#171

Post by duxup »

crb002 wrote: post #160
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, an…

Do Gitlab and such companies even have the volume of employees to show up on WeWork's balance sheet?

How many of those places have people working at co-working spaces anyway? As opposed to home?

Not sure that during a downturn companies, or even individuals will be more likely to go for paying for fancy coworking space... perhaps less so?

My understanding is WeWork is more likely to be MORE sensitive to an economic downturn compared to their competitors as their valuation will put more pressure on them to make money and arguably they might already be behind the bullet on that one.

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

#172

Post by gwern »

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.

It's also a successful business in that their growth plans could potentially deliver real value and economies of scale (talking purely hypothetically here). There's a very big difference between a startup which is profitable but would be far more valuable if it could grow using investments, a startup which is premised on economies of scale and so which fails if it can't grow fast enough to take off from its runway, and a startup like Theranos where the tech did not and probably could never work regardless of how many customers it had.

Even if We would fail for lack of further investments (because it's type #2), that doesn't mean it was #3, a Theranos. In both #1 and #2, Softbank has a lot of leverage over Adam, and in both it's kind of a game of chicken: neither Softbank nor Adam want to see lack of cash cause We either permanently curtail its potential (#1) or die (#2).

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

#173

Post by wasdfff »

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.

What happens to wework when landlords one day offer leases directly to wework tenants? I’m not sure why landlords aren't doing that right now.

Use wework to fill the building, then go around them to get more cash by leasing directly to the tenants. Tenants might even see rents lower.

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

#174

Post by naravara »

crb002 wrote: post #160
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, an…

If you want to be durable in a downturn you need resilient or countercyclical industries leasing from you.

If they had a bunch of boring utility companies and collections agencies leasing from them then we might be onto something.

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

#175

Post by philistine »

rossdavidh wrote: post #86
notyourday wrote: post #74

Earlier quoted context omitted.

> Preferred shares existed before Facebook, and it may not the be norm, but there's a reason we no longer see the hostile takeovers from the 80's. That has nothing to do with preferred shares. Most of public companies adopted poison pills aka shareholder right protection plans which work along the lines of this: 1. If someone acquires a certain percentage of company shares without board of directors agreeing to it, t…

While there are issues with Zuckerberg, I think it bears noting that the FB IPO wasn't done because he needed the money, but rather because they were forced too by law because too many people had ownership. So, he didn't give great terms in the IPO because he didn't really need any cash; FB was already cashflow-positive. This is a marked contrast to WeWork.

I think the Facebook IPO was done for one reason only; public relations.

As is the case with toxic discourse on his website, the nonchalant attitude with private information, Zuck loves to steer clear of taking responsibility for anything. The IPO allows the message to be: it's not my personal responsibility, I'm merely the CEO of the company.

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

#176

Post by selimthegrim »

selimthegrim wrote: post #142
jeremyjh wrote: post #17

> Mr. Neumann still has allies among the directors and the ability to fire the entire board thanks to shares he controls that carry extra votes. It defies imagination that a fund would put 10B into a company whose CEO is accountable to no one. I think we may also see new leadership in SoftBank, or at least their next fund.

Reposting because FT had it up: https://www.twitter.com/nickatfp/status/1171613239580516352

https://twitter.com/NickatFP/status/1173819520584208384

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

#177

Post by solidasparagus »

cylinder wrote: post #168
crb002 wrote: post #160

Earlier quoted context omitted.

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, an…

Why on earth would stripe pay a middle man like WeWork to manage their office and lease?! Stripe is looking at buying an entire building. I'm pretty sure they can handle a 15 yr lease just fine. And don't need WeWork staff to decide what their office kitchens need.

I assume they mean using WeWork for Stripe's non-primary offices where flexibility is often more valuable.

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

#178

Post by [deleted] »

crb002 wrote: post #160
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, an…

[deleted]

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

#179

Post by manigandham »

solidasparagus wrote: post #177
cylinder wrote: post #168

Earlier quoted context omitted.

Why on earth would stripe pay a middle man like WeWork to manage their office and lease?! Stripe is looking at buying an entire building. I'm pretty sure they can handle a 15 yr lease just fine. And don't need WeWork staff to decide what their office kitchens need.

I assume they mean using WeWork for Stripe's non-primary offices where flexibility is often more valuable.

Stripe is at a size where they can easily afford all the flexibility they need without a middleman company.

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

#180

Post by bsder »

manigandham wrote: post #179
solidasparagus wrote: post #177

Earlier quoted context omitted.

I assume they mean using WeWork for Stripe's non-primary offices where flexibility is often more valuable.

Stripe is at a size where they can easily afford all the flexibility they need without a middleman company.

Stripe would almost certainly prefer to outsource this for places where they have a small handful of employees, and dealing with one company has a big opportunity cost buried in it that they almost certainly would be willing to pay.
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