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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

#281

Post by [deleted] »

ghaff wrote: post #119
sk5t wrote: post #66

Earlier quoted context omitted.

> Peloton is one that comes to mind Is it not possible that both investors and the public will find the shine off the apple of pairing two independently somewhat unattractive things--a stationary bicycle and a hefty monthly fee--as used models start to hit the secondary market? Have you ever tried to sell a used stationary bicycle? It ain't easy! The evidence of the gulf between good intentions and regular use is rig…

It's certainly not hard to imagine Peloton is something of a fad. There is no shortage of those in the fitness space--in addition to the, as you say, general omnipresence of New Year's resolutions vs. ongoing use.

[deleted]

Re: WeWork says will file to withdraw IPO

#282

Post by fred_is_fred »

JumpCrisscross wrote: post #152
vkou wrote: post #140

Earlier quoted context omitted.

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…

You forgot one key thing. Don't stop learning. Too many former colleagues of mine got busy, got comfortable, or both, and now find themselves in a limited job market.

Re: WeWork says will file to withdraw IPO

#283

Post by maehwasu »

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 . . .

Alternatively, never be too quick to attribute to stupidity when there’s a strong incentive for malice to take advantage of that attribution to hide itself.

Re: WeWork says will file to withdraw IPO

#284

Post by vkou »

wil421 wrote: post #241
JumpCrisscross wrote: post #152

Earlier quoted context omitted.

> 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…

How does an Individual Contributor (IC) have to worry about paying taxes? I’ve never worked at a company and had to worry about the timing of my taxes. Save enough for 2 years? Only a very small percent could actually save 2 years worth of salary. For a family I’m not sure if anyone able to do this. The standard advice is 6 months.

> Save enough for 2 years? Only a very small percent could actually save 2 years worth of salary. For a family I’m not sure if anyone able to do this. The standard advice is 6 months.

You don't need to save 2 years of salary.

You need to save 2 years of your expenses.

As a SWE, you make at least ~3x what lower-income people in your area make. If you live with the same expenses as those people, you should be saving 2 years of expenses, every year that you work. It's clearly possible to live that way - most people do it just fine.

If, however, you are a good participant in the consumer economy, and spend every dollar that you make (and two pennies besides), a downturn may be tough to weather. You might even have to... not renew the lease on that second Tesla.

Re: WeWork says will file to withdraw IPO

#285

Post by maehwasu »

Hongwei wrote: post #5
waterfowl wrote: post #2

This whole thing has been nuts. It's clear no one who invested late ever actually believed in the valuations -- matt levine says it better "We came to market and public investors informally expressed some skepticism and its private backers were immediately like “wait this company isn’t profitable, why did no one tell us, burn it all down.” I am not saying that the public markets are wrong, but I kind of wanted there…

Even simpler: it's fraud and they got caught. Hopefully it doesn't paint other great IPOs in a bad light.

How is it fraud? They disclosed everything, people said “this is crap,” and they all had to take a huge bath.

Yes, Softbank and others will lose a lot of money, and Neumann made money off them, but they’re all grownups who knew what they were getting into.

Re: WeWork says will file to withdraw IPO

#286

Post by Traster »

Solar19 wrote: post #276

Why is WeWork considered a tech company? And what exactly is wrong with their business model? That's not clear to me from the article. It says they take long-term leases and sell short-term leases. That seems straightforward and potentially lucrative if they're adding value, making it easier to find suitable short-term office space, etc. Is it just that they're not making money doing this? Why not?

I think the reason you don't get an answer to this is because this is article number 100352752. WeWork isn't a tech company because there's no unique technology they use to rent out office space- which is how they make money. Their business model is "Sign long term contracts cheap, rent out to short term tenants expensive". Which is fine, but it doesn't justify their valuation (which is predicated on them 'disrupting' the office rental industry) and isn't fine - because so far they spend more money renting the office space than they do leasing it out to their tenants. So their real business model is "Rent $1 worth of office space out for 50 cents". They had no compelling path to profitability.

Re: WeWork says will file to withdraw IPO

#287

Post by goatinaboat »

notyourday wrote: post #275
goatinaboat wrote: post #260

Earlier quoted context omitted.

Well sure but why would they pay 10x as much as it’s worth? Remember they have already invested $10.5Bn. So they would be paying a grand total of $20.5Bn and what would be their exit strategy from that?

Lets presume that for some reason Softbank wants to play in this space. What are the plays that are at its disposal? 1. It can buy Regus. Regus does not need money to survive, has poisoned pill and does not have a brand recognition. With 3B yearly revenue. Anything below 8x the revenue probably won't get a board's automatic stamp of approval and anything below 10x won't get a board's enthusiastic "Yes, please!". So t…

They may not be looking for an exit at all.

But they have to. Like all VC funds Vision Fund has a set lifecycle. In their case they have 5 years to invest (starting on the day the fund closes to new investors, which has already happened) and then 7 years until maturity at which point it dissolves and returns capital to investors. The clock is ticking.

Re: WeWork says will file to withdraw IPO

#288

Post by matt-attack »

martinald wrote: post #21

Cannot understand how they can restructure this. Even one new building in London which isn't anywhere near structurally complete WeWork has taken 18 floors on a 25 year lease (I think due to open 2020 or 2021). Is there a way they can walk away from all these commitments? I understand they have a SPE structure which potentially allows them to do that, but I imagine there must be some costs or downsides to it, otherwi…

I thought companies walk away from leases all the time. Every restaurant you’ve ever eaten at the is no longer there probably bailed on a lease.

Re: WeWork says will file to withdraw IPO

#289

Post by jonny_eh »

roland35 wrote: post #10

Wow what a huge rise and fall in the past few weeks! What I don't understand is how the S-1 filing ever saw the light of day? How could nobody reviewing that see any of the red flags that were obvious? I think this just shows how hard it is to be objective when there are so many cultural/financial/etc influences affecting your judgement. Obviously their team bought the hype (and as a sad Browns fan I can totally symp…

Bystander effect, nobody speaks up because no one else has spoken up. Even if you have a feeling that something is a bad idea, you don't want to stick your neck out and have to defend your claim.

Re: WeWork says will file to withdraw IPO

#290

Post by codq »

jetti wrote: post #173
myth_buster wrote: post #15

I'm just impressed by how well the fallout has been predicted by Scott Galloway[0] and Matt Levine. Has been an incredible learning experience for me on the unicorn class in general. Looking forward to unicorn report for 2019 [1]. [0] https://www.profgalloway.com/wewtf-part-deux [1] https://corpgov.law.harvard.edu/2019/03/20/the-unicorn-ipo-r...

It has been super interesting listening to Scott Galloway blast WeWork and their business model on the podcast Pivot.

Would be great to remove Kara Swisher's self-aggrandizement and name-droppery and isolate Galloway's takes entirely.
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