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.
Facebook leases an entire WeWork building in London, but I imagine it's not their long-term plan.
Considering he has the votes to fire the entire board, I'd be shocked if this happens. Softbank is completely fucked.
It depends, I suppose, on how soon We needs more investor money. If he actually exercises his right to fire the entire board, it seems like it would be hard to get somebody else to chip in big money. On the other hand, it could be that Softbank knows it won't work, but feels they have to be seen attempting something.
"We needs more investor money"
I read this and heard Gollum saying "We wants it. We needs it."
> 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.
You can thank loose monetary policy that has created an unbalance between capital seeking returns and the number of investment opportunities. Executives have leveraged this into abusive multi-class share structures that sacrifice shareholder's ability to reign in company behavior. The result is a few tech executives wielding unaccountable authority over incredibly powerful economic resources.
The real question is what is the endgame for our current worldwide incredibly loose monetary policy and deep wealth inequality. Literally nothing good comes to my mind, at best we'll get a slow return to a few % interest rates on major 10yr notes, which means a decade of garbage returns on pretty much any asset class, problems with pension funds, general malaise. At worst, well, last time we had this setup was 1930s and the various world govt stimulus went towards war efforts ...
Eh. I don’t think the Delaware courts would go for it. Ebay vs Newmark is on point.
Does not have much in common - single class of stock with the same rights vs. different classes of stock with different rights.
Still stands for the proposition that directors have a fiduciary duty to shareholders which is subject to judicial scrutiny in the face of self dealing.
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.
It's not a terrible business indeed. And I think the bigger scale can help here.
But it's also a very risky business, requiring a lot of capital, and it's not at all a SaaS business. The valuation was crazy.
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.
Because demand might be elastic and you can keep costs closer to utilization and outsource stuff you don't want to do like manage an office Same reason companies pay Google and Amazon for cloud servers
But plenty of "non-WeWork" office space offerings have already been like that for decades. They'll provide janitors, receptionists, etc unless you opt for spaces without it to run your own.
Stripe is at a size where they can easily afford all the flexibility they need without a middleman company.
Isn't that We's end goal though? To get billion dollar companies like Microsoft, Stripe, etc. as tenants. People that don't really want to deal with running an entire building when they can just pay someone else to do it.
Counterpoint: Google now outrights owns a absurd amount of buildings outright on Manhattan's West Side near SoHo.
These big companies have so much money, that they stand to make even more money just holding the damn real estate for all they care if they end up not using it.
It's the same as a individuals buy vs. rent scenario for a house. Sure, rent may be cheaper, but there are long term pros just holding the property yourself if you can afford it.
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.
If that was true then they would be, but they aren't. Companies that big can easily afford one or many full-time employees focused on office and resource management which is more than enough to figure out a few leases. Remember this is a company that already has a major international business in one of the most regulation industries. Adding in a few real-estate deals is unlikely to be a major source of friction.
> If that was true then they would be, but they aren't.
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…
There's also the important bit where VRBO attempted to comply with local hoteling regulations and AirBnB just ignored them or even actively encourage hosts to ignore the law.
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.
WeWork has a "Powered by We" service that companies like Amazon use so they don't have to manage a new building. They allow WeWork to deal with everything from top to bottom. https://www.poweredbywe.com/