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WeWork and Counterfeit Capitalism

mattstoller.substack.com

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Re: WeWork and Counterfeit Capitalism

#161

Post by KoftaBob »

iamkroot wrote: post #80
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…

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

Because the LPs who fund VCs aren't only using wealthy individual's money, people's pensions are in there too.

Re: WeWork and Counterfeit Capitalism

#162

Post by jpeanuts »

uxp100 wrote: post #55
Wowfunhappy wrote: post #42

Earlier quoted context omitted.

> At least Uber and Lyft provide something new (calling taxis from phones) It's less than that—they provide the ability to call taxis from an app . You've been able to call taxis from phones for significantly longer, you just had to dial a number. I know this isn't a common way to call taxis everywhere, but it was in some locations. I went to college in a small-ish city called Saratoga Springs. If you wanted a taxi,…

I think what they uniquely provide is actually tracking the cab to your door. I probably called 3 cabs total before I was aware of uber, and my experience each time was wait for around an hour, even if you had pre-arranged the pickup, and when calling the dispatcher, they would just say the cab was 10 minutes away, no matter what was actually going on.

Perhaps even more significant is that Uber gave you the price of the trip in advance. With regular taxis you had to guess, and if you weren't familiar with area, you best guess might well be just "expensive". And then you had to worry about being ripped off.

Uber gave everyone access to information about the cost of taxis - and generally people found it wasn't as expensive as they'd thought.

Re: WeWork and Counterfeit Capitalism

#163

Post by RankingMember »

TillE wrote: post #140
johnfactorial wrote: post #120

Earlier quoted context omitted.

> They control close to 50% of e-commerce which itself represents less than 12% of total retail sales. Both of these numbers are surprising to me, can you source them? Particularly the first one, which I assume is a global measure, and I'd be interested to know what % of North American e-commerce Amazon controls. I wager I could walk outside my home and ask 100 people on the sidewalk to name one e-commerce site and f…

I would struggle to name a single online general retailer that isn't Amazon. Unless you count, like, Walmart. Basically everyone else has some kind of niche. Amazon sells everything.

Jet still exists (a Walmart acquisition), but I don't hear much about them and have a feeling they're not doing so great.

Re: WeWork and Counterfeit Capitalism

#164

Post by hobofan »

johnfactorial wrote: post #120
jamiequint wrote: post #40

> This is of course Amazon’s model, which underpriced competitors in retail and eventually came to control the whole market. This is false. First, Amazon is far from controlling the whole market. They control close to 50% of e-commerce which itself represents less than 12% of total retail sales. Second, Amazon didn't predatory price, or if it did, it didn't for long, certainly not long enough to achieve its current m…

> They control close to 50% of e-commerce which itself represents less than 12% of total retail sales. Both of these numbers are surprising to me, can you source them? Particularly the first one, which I assume is a global measure, and I'd be interested to know what % of North American e-commerce Amazon controls. I wager I could walk outside my home and ask 100 people on the sidewalk to name one e-commerce site and f…

In North America, Walmart seems to be a significant competition amongst others.

Clothing is also a big part of e-commerce, and Amazon doesn't have a good hold on that.

Re: WeWork and Counterfeit Capitalism

#165

Post by ClumsyPilot »

iamkroot wrote: post #80
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…

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

What would it take to convince you that unregulated markets lead to fraud? Are events like 2008 and dotCom bubble unimpressive to you?

Re: WeWork and Counterfeit Capitalism

#166

Post by statusquoantefa »

legitster wrote: post #89
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?

This is a big topic in business school - never compete on price for that exact reason. Although things like Uber may be a different beast. They basically got big enough that cities were willing to push aside all of these special interest rules that kept the taxi industry crappy. So by dumping their product and acquiring customers, they were able to change the legal environment and infrastructure around them. But they…

> never compete on price for that exact reason

no, you should compete on price if you are the low cost producer, as my neighbor comment notes. monopolists frequently are the low cost producer because of economies of scale, scope, etc.

another "compete on price" strategy is if you are the disruptive upstart: you have small market share, so your losses (tangible and intangible) will be lower compared the losses suffered by the fat lazy high-multiples incumbent who must satisfy angry shareholders when they see profit eroding.

Re: WeWork and Counterfeit Capitalism

#167

Post by senderista »

samlevine wrote: post #65

> 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 o…

It didn't hurt that they actually poached the key supply chain executives from Walmart.

Re: WeWork and Counterfeit Capitalism

#168

Post by _edo »

legitster wrote: post #147
_edo wrote: post #94

Earlier quoted context omitted.

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.)

The 'yikes' was more a response to his credentials. I agree, this argument seems scary coming from a policy adviser.

I apologize, I took your comment personally when I shouldn't have.

Re: WeWork and Counterfeit Capitalism

#169

Post by mbesto »

legitster wrote: post #89
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?

This is a big topic in business school - never compete on price for that exact reason. Although things like Uber may be a different beast. They basically got big enough that cities were willing to push aside all of these special interest rules that kept the taxi industry crappy. So by dumping their product and acquiring customers, they were able to change the legal environment and infrastructure around them. But they…

> This is a big topic in business school

I could be wrong, but "network effects" is a recent phenomenon and business schools haven't really taught students about it much. Either way, we have very little history for assets that appreciate in value the more they are used. Traditionally it's been the exact opposite. In fact, this concept basically doesn't exist in finance other than translations into FCF...but depreciation does.

Re: WeWork and Counterfeit Capitalism

#170

Post by nradov »

Ididntdothis wrote: post #131
nradov wrote: post #123

Earlier quoted context omitted.

What is an "acceptable" return? No one has a right to achieve any particular return.

A return that lets you retire in this lifetime seems to be the minimally acceptable return.

Return by itself is meaningless. If you want to discuss retirement then you have to account for the other variables: consumer price inflation, risk, contribution levels, lifespan, etc. For individual workers the most practical suggestion is to save more instead of expecting high returns.
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