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WeWork chases new financing as cash crunch looms

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Re: WeWork chases new financing as cash crunch looms

#51

Post by dan_quixote »

vraivroo wrote: post #36
cgh wrote: post #24

I don’t understand how this company employed 1500+ programmers, PMs and data science people. What did they do? I guess not much, as 500 of them got laid off recently.

The comical thing is how often their systems are down. When I was in a WeWork we used to get free coffee all the time because they couldn't accept payments at the moment.

When I was at a WeWork last year, kombucha and cold brew on tap was out of service at least 50% of the time. I took this as mismanagement then, now I wonder if it was simply cost-cutting.

Re: WeWork chases new financing as cash crunch looms

#53

Post by dustinmoris »

joshstrange wrote: post #2

Does anyone here on HN use WeWork spaces and enjoy them? I'm not suggesting they are bad, I honestly don't know. Ignoring the business model, the CEO, the failed IPO, do YOU or do you not enjoy that actual offering of WeWork?

I'm currently typing this message from a WeWork. I've been at 3 different locations so far and this one is the nicest, overlooking Tower Bridge and Tower Hill in London. Absolutely stunning office, not as dull and dark as the other WeWorks I was before and nice community here and as always great free coffee, but apart from that, there's nothing unique about WeWork. It's just a nice office, and unless the space is in a stunning location like the one at Tower Hill in London, it's actually wearing off very very quickly.

Re: WeWork chases new financing as cash crunch looms

#54

Post by raiyu »

This could be the best situation for Softbank. WeWork is obviously in desparate need of cash, no one is going to touch it with a ten foot pole. Softbank is too invested for it to fail. They can buy up 50% of the equity remaining for any sort of investment since they will have a gun to their head the company will have to accept or go bankrupt. Adam Neumann's shares will become worthless in the process and new shares will be issued for the new co-CEOs.

So with $11B in capital committed to WeWork at the end of the whole mess Softbank can end up with 90% ownership. Get the company on track financially and see if they can bring it to an IPO in the next 2-3 years when they have solved their financial issues. And hopefully realize some sort of return, or at the very least not leave a $9B hole in their vision fund.

Re: WeWork chases new financing as cash crunch looms

#55

Post by jborichevskiy »

AgloeDreams wrote: post #25
youngtaff wrote: post #15

Earlier quoted context omitted.

Don't understand your linkage to tech stocks… WeWork are a property company

I think their comment is a little apocalyptic but I can say that wework going under could possibly trigger a large number of mid-small-size startups losing their spaces and possibly ending up out of business.

Surely most of these startups could just move to competitors or go remote for a few weeks/months? Part of the advantage of being a mid-small startup is the mobility and flexibility.

Re: WeWork chases new financing as cash crunch looms

#56

Post by atdrummond »

raiyu wrote: post #54

This could be the best situation for Softbank. WeWork is obviously in desparate need of cash, no one is going to touch it with a ten foot pole. Softbank is too invested for it to fail. They can buy up 50% of the equity remaining for any sort of investment since they will have a gun to their head the company will have to accept or go bankrupt. Adam Neumann's shares will become worthless in the process and new shares w…

He already ferreted away $700m. He'll be fine.

Re: WeWork chases new financing as cash crunch looms

#57

Post by dbt00 »

lordnacho wrote: post #20

Perhaps someone in the property business can illuminate something for me. I read somewhere that WeWork runs each site as a separate business. Can this really be true? It would seem to allow them to let each entity go bankrupt, which doesn't seem to be a sensible thing for the landlord to want to expose himself to. Sure he gets the building back, but you'd think there's then no advantage to renting it out to WeWork, s…

It’s pretty standard to stand up a shell corp for each piece of real estate you own/manage to take advantage of tax laws and protect yourself from property liability.

Re: WeWork chases new financing as cash crunch looms

#58

Post by [deleted] »

raiyu wrote: post #54

This could be the best situation for Softbank. WeWork is obviously in desparate need of cash, no one is going to touch it with a ten foot pole. Softbank is too invested for it to fail. They can buy up 50% of the equity remaining for any sort of investment since they will have a gun to their head the company will have to accept or go bankrupt. Adam Neumann's shares will become worthless in the process and new shares w…

[deleted]

Re: WeWork chases new financing as cash crunch looms

#60

Post by jiofih »

josephjrobison wrote: post #37

Interesting that Goldman Sachs pumped up their valuation to $60-90 billion at one point, but now won’t give them a lifeline: “ Goldman Sachs, one of WeWork’s investors, advisers and customers, had been among a consortium of banks willing to lend $6bn had the IPO succeeded but has so far sat out the new financing discussions out of concern about the level of uncertainty surrounding the company, one person said.”

My first thought was related to this: hhow is it possible that one moment the company is ready for an IPO, with all the due diligence that comes with it and backing of financial giants, and then next month be desperate for cash? Isn’t there some sort of fraud going on in this situation?
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