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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

#151

Post by s3r3nity »

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…

Not to be too pedantic, but WeWork HQ is in New York and is not a tech company (according to general sentiment and investor analysis,) so any attempt to correlate to Silicon Valley trends aren't quite fair nor appropriate.

Re: WeWork says will file to withdraw IPO

#152

Post by JumpCrisscross »

vkou wrote: post #140
JumpCrisscross wrote: post #68

Earlier quoted context omitted.

> They're all really young and naive And now they'll be a little less of each. The lessons they can learn from this experience could put them ahead of the pack. We have an entire generation that knows nothing but post-crisis bull markets. When the next downturn comes, those tempered by bad experiences have the opportunity to position defensively and react nimbly. (Or at least more defensively and nimbler than their p…

Could you define: "Position yourself defensively and react nimbly" means to an IC?

> Could you define: "Position yourself defensively and react nimbly" means to an IC?

Depends on specifics. Broadly speaking, having been an IC, the lessons I learned the hard way were:

(1) Pay your taxes early and often. Keep your credit and channels open fixed-cost obligations low. (Nimble and defensive.)

(2) Save aggressively. Rule-of-thumb liquidity advice doesn't apply to you; I learned to keep 2 years of cash in Treasuries et cetera. (Defensive.)

(3) If you can't do (2), favor full-time offers, even those with lower face-value economics. (Defensive.)

(4) Don't over-negotiate. (Nimble.)

(5) Don't feel overly committed to your current gig(s). You can keep grabbing drinks with old colleagues from your new job. When the ship goes down, the captain gets commended for going down with it; everyone else just drowns. (Nimble.)

Re: WeWork says will file to withdraw IPO

#153

Post by number_six »

oillio wrote: post #40
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…

After a while living in an echo chamber of yes-men, you start to believe your own bullshit. Also, valuations are so nebulous and ungrounded in reality at this point. Who is to say what anything is worth. You put something out there and someone is willing to pay billions for it, who are you to say that isn't the right value. There are a lot of problems to pin on Adam, I don't think the valuation is one of them.

The valuation is from Softbank consistently buying rounds of equity at higher and higher valuations that they themselves were creating.

Softbank bought in, so this is more valuable, so Softbank will buy in again at a higher valuation, so this is more valuable, so Softbank will buy in again at a higher valuation; and round and round it went until we hit ~$40B

Re: WeWork says will file to withdraw IPO

#154

Post by pbreit »

JumpCrisscross wrote: post #87
pbreit wrote: post #82

Earlier quoted context omitted.

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 off…

So not really any "cheating", right?

Re: WeWork says will file to withdraw IPO

#156

Post by JumpCrisscross »

mikeryan wrote: post #149
ethbro wrote: post #111

Earlier quoted context omitted.

Furthermore, and this to me is the most damning indictment: where's the moat? SoftBank and Masayoshi Son's hypothesis is: 1. Find a market which can be captured by a business with access to massive capital 2. Provide massive capital 3. Extract profits once a monopoly has been established WeWork is a terrible example of this, because in no way does scale give them unique advantages. And furthermore, "scale" in this co…

I can't quantify it - but WeWork's scale does give them a bit of an advantage. I run a small digital agency, as a WeWork member when I'm on the road being able to know I can find and book space for meetings or work is invaluable. We've also spun up offices in new cities (Mexico City for us) easily and quickly with a confidence in the level of service and support that we're getting. There is a premium for this and we'…

> WeWork's scale does give them a bit of an advantage

Within the original thesis per se it gave them a possible demand-side advantage. (Commercial real estate is too big for any meaningful sell-side advantages.)

Being able to say "let's open a branch in Singapore and see how it goes for 6 months" with a few clicks is quite awesome. If I trusted it to be around in a few years, it would change how I think about deploying people.

To be able to deliver that value prop, you need seats available in Singapore. (And New York and London and Dubai.) Hence a potential scaling advantage.

Re: WeWork says will file to withdraw IPO

#157

Post by notyourday »

vkou wrote: post #144
notyourday wrote: post #139

Earlier quoted context omitted.

Which brings a question - could it be that this entire thing was Softbank's play to control the entire company? $6B to get the seat at the table. $10B now as a down around for a wipe out?

$16B is a lot to pay for a turkey, even if you wipe out all the other shareholders in it.

True, but consider:

1. They want some turkey.

2. WeWorks is a turkey that already exists, in a good enough form and, should non-wanker management be installed, fat trimmed and the co being returned to real estate business rather than technology business, it seems to be a pretty tasty and immediately available one.

3. Buying it outright would have been a lot more expensive.

Is it any different from Softbank investing in Sprint? They could have invested in smaller company and built it themselves but instead they dumped money into someone who was already there and slowly reshaped the management

Re: WeWork says will file to withdraw IPO

#158

Post by munk-a »

mschuster91 wrote: post #125
djsumdog wrote: post #112

Earlier quoted context omitted.

> or cheat This is called "Being disruptive." Basically, just ignore the law, but make sure you get enough workers and customers that love you so that they turn against politics when you break the law.

> Basically, just ignore the law, but make sure you get enough workers and customers that love you so that they turn against politics when you break the law. Unfortunately, this seems to be the only way that's not outright massive violence such as Hongkong or France to get politicians to do their goddamn job. Taxi services have had a really massive lobby power in the US.

Is Uber in it for the social change?

If not then this is just a silly point. Some of the regulations were unreasonable and the result of corruption - but Uber also skirted insurance and background check related laws at various times.

Re: WeWork says will file to withdraw IPO

#160

Post by JumpCrisscross »

munk-a wrote: post #158
mschuster91 wrote: post #125

Earlier quoted context omitted.

> Basically, just ignore the law, but make sure you get enough workers and customers that love you so that they turn against politics when you break the law. Unfortunately, this seems to be the only way that's not outright massive violence such as Hongkong or France to get politicians to do their goddamn job. Taxi services have had a really massive lobby power in the US.

Is Uber in it for the social change? If not then this is just a silly point. Some of the regulations were unreasonable and the result of corruption - but Uber also skirted insurance and background check related laws at various times.

> Is Uber in it for the social change?

The end result is a safer, better-functioning street transit system (in New York at least). I don't care if they were in it for social change or for the money. They delivered results, both themselves and by kicking taxis up a notch.

(Many activists aren't in it for altruistic purposes. That doesn't make their work less meaningful.)

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