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WeWork says will file to withdraw IPO

reuters.com

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Re: WeWork says will file to withdraw IPO

#81

Post by skrebbel »

aresant wrote: post #49

This is almost too perfect but SoftBank is, at the moment, trying to hire a valuations director: https://www.indeed.com/viewjob?jk=cf0378114e63aeb4&from=tp-s... Sort of a "Never attribute to malice that which is adequately explained by stupidity" kind of thing . . .

In their defense, Masayoshi Son made much of his fortune by applying the greater fool theory (and lost much of it that way as well). There's a chance they really just took a calculated risk here, and with many of their other investments too. The risk being not so much the success of the company like normal VC investments, but explicitly a "maybe we can profitably push this through an IPO, let's see if the sheeple fall for it" kind of thing.

Re: WeWork says will file to withdraw IPO

#82

Post by pbreit »

JohnJamesRambo wrote: post #43
S_A_P wrote: post #19

What I don't understand is how do things get this far down the road before a good old fashioned sanity check happens? I have got to think that Soft Bank knew/knows the valuation was off. The fact that they pushed on means they either intended to try and get away with it/take the money and run as I cant believe incompetence is the reason here. How did this get so far along??? As for Adam N, I have to think some part o…

“There are three ways to make a living in this business: be first, be smarter, or cheat.“ -Margin Call SV ran out of the first two because they are much harder. We are left with the dying gasps of companies trying the third way.

How is this comment relevant to WeWork? How has it "cheated"? It definitely is early/first and very smart.

Re: WeWork says will file to withdraw IPO

#83

Post by haasted »

NotSammyHagar wrote: post #80
kache_ wrote: post #41

Earlier quoted context omitted.

There are in fact a few unicorns with recurring revenue that is close to their operational costs. You just don't read about them on the news unlike the trainwrecks. Good news leads to no news.

What are those? Snowflake is one I think

Cloudflare? Not sure whether they are profitable at the moment, but their product seems substantial.

Re: WeWork says will file to withdraw IPO

#84

Post by gtirloni »

pbreit wrote: post #82
JohnJamesRambo wrote: post #43

Earlier quoted context omitted.

“There are three ways to make a living in this business: be first, be smarter, or cheat.“ -Margin Call SV ran out of the first two because they are much harder. We are left with the dying gasps of companies trying the third way.

How is this comment relevant to WeWork? How has it "cheated"? It definitely is early/first and very smart.

Early/first in what exactly?

Re: WeWork says will file to withdraw IPO

#85

Post by human20190310 »

michaelt wrote: post #57
wastedhours wrote: post #30

Earlier quoted context omitted.

> I have to think some part of him knew that it was a bullshit valuation After reading some of the stories, I'm minded to believe maybe he didn't...

It's possible Neumann was some sort of idealistic hippie who believed his own BS and got in over his head. But I have trouble squaring that with extremely hard-nosed moves like cashing out $700 million, and getting loans from the company to buy buildings to lease back to the company.

Hippies are at least as greedy as anyone else.

Re: WeWork says will file to withdraw IPO

#86

Post by benj111 »

S_A_P wrote: post #19

What I don't understand is how do things get this far down the road before a good old fashioned sanity check happens? I have got to think that Soft Bank knew/knows the valuation was off. The fact that they pushed on means they either intended to try and get away with it/take the money and run as I cant believe incompetence is the reason here. How did this get so far along??? As for Adam N, I have to think some part o…

Companies are worth what people are willing to to pay for them. Softbank was willing to pay an amount most others weren't. In that situation there are 2 options, take the lower price, or wait until the higher price is proved to be justified.

I don't know at what point we can decide that the vision fund isnt, well, visionary. As things stand though, if you have faith in Weworks business model, this seems like a reasonable move.

To be clear, I don't have any particular faith in that business model, but I don't have any money on the line either way.

Re: WeWork says will file to withdraw IPO

#87

Post by JumpCrisscross »

pbreit wrote: post #82
JohnJamesRambo wrote: post #43

Earlier quoted context omitted.

“There are three ways to make a living in this business: be first, be smarter, or cheat.“ -Margin Call SV ran out of the first two because they are much harder. We are left with the dying gasps of companies trying the third way.

How is this comment relevant to WeWork? How has it "cheated"? It definitely is early/first and very smart.

> How is this comment relevant to WeWork? How has it "cheated"?

They borrowed short, lent long and then pretended it was as sustainable business. To their credit, they abundantly disclosed their shenanigans. (I haven't seen any evidence suggesting investors can reasonably claim fraud.) But they were playing fast and loose with basic economics.

At its core, sure, WeWork could have been a business. Its thesis, that office space should be treated as a service versus capital expense, is plausible. But there was so much garbage--the party-at-work hypothesis, thoughtless cross-selling, nepotism, consciousness nonsense, self-dealing, et cetera--that the value got diluted while the price was pumped.

Re: WeWork says will file to withdraw IPO

#88

Post by papito »

akulkarni wrote: post #77
john_moscow wrote: post #71

Earlier quoted context omitted.

Cloudflare still relies on the "massive amount of free users creating buzz vs. a tiny fraction of paid users". Although not an obvious scam, they may very well go the Groupon way.

This is a classic "bottoms-up" model that is quite viable (eg Dropbox, Slack, Zoom, Elastic, MongoDB). Not sure why anyone would call it a scam. In fact, I would be wary of software companies without a base of free users, as that means the company needs to keep spending a lot of its revenue on sales and marketing.

Not necessarily. You don't need marketing and sales people if you have a free-tier product that markets itself. Michael Stonebraker, the guy who took Postgres from academia and into the real world, talks about how he applies this with VoltDB

https://www.se-radio.net/2013/12/episode-199-michael-stonebr...

Only on a tangent - it's an otherwise fascinating episode from a database wizard.

Re: WeWork says will file to withdraw IPO

#90

Post by phamilton »

ixtli wrote: post #12

I feel bad for the stary-eyed kids one year out of college that are going to get mass fired. They're all really young and naive :/

At Yahoo (I joined via acquisition) we had a mass layoff a few months after our 1 year vesting cliff (so we were all interviewing and planning to leave). A few people already had offers in hand but hadn't given notice and were laid off. They were so excited. Meanwhile, the new grad got laid off and was blinking back tears.

It sucked. I left a month later and even though I told management I was looking they chose to keep me for a month and cut the kid who actually wanted to work there.

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