WeWork and Counterfeit Capitalism • Hacker News Board

Re: WeWork and Counterfeit Capitalism

#91

Post by [deleted] » Wed, Sep 25, 2019, 5:36 PM UTC

janee wrote: post #78

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…

> with the idea of profiting later on via the surviving monopoly I don't understand...if you undercut your competitors so you're the sole survivor, I don't see how profiting is a obvious end result. When you return prices to market value wouldn't competitors just appear again. Is predatory pricing really such a bad thing, I'd assume the market would just corrects itself later?

[deleted]

Re: WeWork and Counterfeit Capitalism

#92

Post by nradov » Wed, Sep 25, 2019, 5:37 PM UTC

Ididntdothis wrote: post #85

iamkroot wrote: post #80

Earlier quoted context omitted.

Why do private investors need protection? Why can't they be held responsible for the foolishness of their actions?

Because with the rise of 401k and lately low interest rates a lot of people were forced into the market who simply don’t have skill or time to learn these skills to make investments in an unregulated market.

The vast majority of 401(k) funds are in large-cap mutual funds which don't invest in IPOs. Most 401(k) plans also offer some sort of money market or Treasury bond fund. It takes about 5 minutes and zero skill to learn that T-bonds are safe investments.

Re: WeWork and Counterfeit Capitalism

#93

Post by legitster » Wed, Sep 25, 2019, 5:38 PM UTC

human20190310 wrote: post #76

I really wish the author had sensed the limits of his argument, because I think the point he's trying to make is basically correct. He's just stretching it to the breaking point by invoking Amazon and the subprime crisis. If he'd left the stretch goals out of it, it would have stood as a perfect foil to the avalanche of "meta-meta-meta analysis of everything except where the money's gonna come from" in the Stratecher…

I can't recommend the Stratechery piece enough (or Stratechery in general).

Re: WeWork and Counterfeit Capitalism

#94

Post by _edo » Wed, Sep 25, 2019, 5:38 PM UTC

legitster wrote: post #71

_edo wrote: post #61

Earlier quoted context omitted.

> [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: als…

Yikes. There's an intelligent conversation to be had for sure about how large firms like SoftBank are intentionally playing the market and unsavvy investors. This isn't it.

Interesting. I'm not sure I understand why one type of charlatan is more important than the other.

If you want WeWork/SoftBank to be regulated, which a lot of people do, it's kind of important that the people doing the regulating understand what they're doing.

(edit: If you think a comment is off-topic then just say so. There's no need to be so insulting.)

Re: WeWork and Counterfeit Capitalism

#95

Post by novalis78 » Wed, Sep 25, 2019, 5:39 PM UTC

He is making an interesting point but misses the source of this ‘counterfeit capitalism’... it’s not “capital”, it’s a printing press run wild leading to misallocations of hard earned productivity surpluses

Re: WeWork and Counterfeit Capitalism

#96

Post by scarface74 » Wed, Sep 25, 2019, 5:39 PM UTC

dllthomas wrote: post #84

janee wrote: post #78

Earlier quoted context omitted.

> with the idea of profiting later on via the surviving monopoly I don't understand...if you undercut your competitors so you're the sole survivor, I don't see how profiting is a obvious end result. When you return prices to market value wouldn't competitors just appear again. Is predatory pricing really such a bad thing, I'd assume the market would just corrects itself later?

If you can maintain a credible threat that you'd do it again (and win), competitors shouldn't be expected to enter the market even as you're extracting rent. This is amplified by any barriers to entry.

See cable companies.

Re: WeWork and Counterfeit Capitalism

#97

Post by briandear » Wed, Sep 25, 2019, 5:40 PM UTC

Ididntdothis wrote: post #85

iamkroot wrote: post #80

Earlier quoted context omitted.

Why do private investors need protection? Why can't they be held responsible for the foolishness of their actions?

Because with the rise of 401k and lately low interest rates a lot of people were forced into the market who simply don’t have skill or time to learn these skills to make investments in an unregulated market.

401ks are rarely self directed investments though. You can pick fund types, but rarely, if ever, could you pick stocks. The 401k is heavily regulated.

And nobody is “forced into the market.”

Re: WeWork and Counterfeit Capitalism

#98

Post by Udik » Wed, Sep 25, 2019, 5:40 PM UTC

coldcode wrote: post #29

While the writer is a irritating in how he presents info, he does have good points. WeWork never looked like a real business to me, I thought the IPO as presented was such a great work of fiction. In the end the "business" is renting office space. It's not worth any more than that. At least Uber and Lyft provide something new (calling taxis from phones, I guess you could think of that as not terribly new) but it did…

WeWork's big mistake is that they didn't roll out their own web application framework and machine learning libraries, and didn't showcase enough their microservices architecture. Sarcasm, but up to a point.

Re: WeWork and Counterfeit Capitalism

#99

Post by john_moscow » Wed, Sep 25, 2019, 5:40 PM UTC

40acres wrote: post #74

For me, this whole WeWork fiasco has shown just how valuable the SEC and the S-1 filing process is. Let's be clear -- Neumann was fired because any investor who read the S-1 was mortified and wouldn't touch the company with a 10 foot pole. If anything, this shows how lawless the private markets are and the lack of guardrails that are present to protect private investors -- perhaps this will lead to some reform in the…

>If anything, this shows how lawless the private markets are and the lack of guardrails that are present to protect private investors

I would go stock up on popcorn. We may see some very interesting lawsuits soon. Unless the Saudis get him, well, the Saudi way.

Re: WeWork and Counterfeit Capitalism

#100

Post by briandear » Wed, Sep 25, 2019, 5:41 PM UTC

BenoitEssiambre wrote: post #30

This doesn't excuse WeWork being excessively unprofitable but low or negative returns don't directly imply anything "Counterfeit". I like to point out that low or negative real returns on stores of value have historically been the norm. Before financial systems existed, almost all investment had negative returns if you didn’t put work and energy into them. To store value, you had to accumulate stuff, buildings or lan…

There are apparently European banks paying negative interest now as well.