WeWork and Counterfeit Capitalism • Hacker News Board

Re: WeWork and Counterfeit Capitalism

#61

Post by _edo » Wed, Sep 25, 2019, 5:01 PM UTC

legitster wrote: post #35

> WeWork then used this cash to underprice competitors in the co-working space market, hoping to be able to profit later once it had a strong market position in real estate subletting or ancillary businesses. > This is of course Amazon’s model, which underpriced competitors in retail and eventually came to control the whole market. This is wrong, wrong, wrong. The difference is Amazon saw what the marginal costs coul…

> [Company] then used this cash to underprice competitors in [market], hoping to be able to profit later once it had a strong market position in [market].

This template appears to be one of the author's deepest understandings of capitalism. It wouldn't be so bad if I didn't look at his resume and realize he was Senior Policy Advisor and Budget Analyst on the Senate Budget Committee from Dec 2014 – Dec 2016.

edit: also 2 years as a Senior Policy Advisor for a congressman

Re: WeWork and Counterfeit Capitalism

#62

Post by ineedasername » Wed, Sep 25, 2019, 5:01 PM UTC

larrik wrote: post #4

> owns buildings personally he leases to WeWork This part bugs me. This is standard procedure for small businesses, having a real-estate business leasing property to your main business. If you want to succeed, you own the building. Otherwise, you are on borrowed time. Edit: alright, great points, thanks!

It's not as common as you may think. I know of a company where the CEO was doing this to line his own pockets. He went to jail for a different fraud (vendor kickbacks) and that's when the company board found out about his self-dealing and sued him for breach of fiduciary.

Re: WeWork and Counterfeit Capitalism

#63

Post by alephnan » Wed, Sep 25, 2019, 5:04 PM UTC

> if Adam and Rebekah have not contributed at least $1 billion to charitable causes as of the ten-year anniversary of the closing date of this offering, holders of all of the Company’s high-vote stock will only be entitled to ten votes per share instead of twenty votes per share.

Re: WeWork and Counterfeit Capitalism

#64

Post by gwbas1c » Wed, Sep 25, 2019, 5:06 PM UTC

anilshanbhag wrote: post #18

"The company is losing an enormous amount of money and 'has no path to profitability at scale'." - well if there is no path to profitability, how is it still worth 10-15 billion ? "If you know Dimon’s actual reputation, him getting suckered isn’t surprising. From what I heard back in 2009, Dimon is a mediocrity who essentially got lucky his bank was too slow to get in on the subprime scam in 2006; he then used his ba…

Selling below cost to drive out competitors is not capitalism: It's called dumping, and is illegal.

Re: WeWork and Counterfeit Capitalism

#65

Post by samlevine » Wed, Sep 25, 2019, 5:06 PM UTC

> This is of course Amazon’s model, which underpriced competitors in retail and eventually came to control the whole market.

Amazon's model is to be better at ecommerce and logistics than everyone else, including Walmart, which itself gained market share through incredible skill at logistics. They reinvest what would be profits into getting better, and frequently succeed at it.

Most companies don't actually do that once they're mature.

Re: WeWork and Counterfeit Capitalism

#66

Post by mountainofdeath » Wed, Sep 25, 2019, 5:06 PM UTC

Welcome to DotCom bubble 2.0.

Re: WeWork and Counterfeit Capitalism

#67

Post by mondaygreens » Wed, Sep 25, 2019, 5:10 PM UTC

readhn wrote: post #39

Is Adam Neumann - Next Elizabeth Holmes?? I would not be surprised to see SEC involved at some point somehow.

A relevant line from the essay that reminded me of Holmes: "The men and women who run them have to be charlatans, because they are storytellers justifying losses."

Re: WeWork and Counterfeit Capitalism

#68

Post by Miner49er » Wed, Sep 25, 2019, 5:15 PM UTC

I see no reason to call this "Counterfeit Capitalism". It's just capitalism.

Re: WeWork and Counterfeit Capitalism

#69

Post by kevin_thibedeau » Wed, Sep 25, 2019, 5:17 PM UTC

alephnan wrote: post #63

> if Adam and Rebekah have not contributed at least $1 billion to charitable causes as of the ten-year anniversary of the closing date of this offering, holders of all of the Company’s high-vote stock will only be entitled to ten votes per share instead of twenty votes per share.

They just need to start their own charities, base them in WeWork offices and charge hefty fees for their personal involvement in fundraisers.

Re: WeWork and Counterfeit Capitalism

#70

Post by lordnacho » Wed, Sep 25, 2019, 5:18 PM UTC

I prefer calling it "Poker Capitalism". What he's describing is a situation where a player with a big stack can bully his way to taking the other players' money, even when his cards are not particularly good or well played.

In any case I think he's got a good point. The main thing I'd say is that capitalism requires both freedom and true signalling. We focus a lot on the former but tend to forget the latter, despite lessons learned since the 1800s.