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WeWork has frittered away $46.7B in value as the stock sinks below ¢50

businessinsider.com

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Re: WeWork has frittered away $46.7B in value as the stock sinks below ¢50

#21

Post by ape4 »

heywhatupboys wrote: post #9
AndrewDucker wrote: post #2

It never had that much value, it just made it look like it did for long enough to get people to invest in it at vastly inflated prices. "Renting offices to work in" was never going to be a silicon valley style success, because it just can't scale that way.

"Taxi services" was never going to be a silicon valley style success, because it just can't scale that way. "Food delivery services" was never going to be a silicon valley style success, because it just can't scale that way.

Those services don't own their taxis or bikes.

Re: WeWork has frittered away $46.7B in value as the stock sinks below ¢50

#22

Post by LudwigNagasena »

heywhatupboys wrote: post #9
AndrewDucker wrote: post #2

It never had that much value, it just made it look like it did for long enough to get people to invest in it at vastly inflated prices. "Renting offices to work in" was never going to be a silicon valley style success, because it just can't scale that way.

"Taxi services" was never going to be a silicon valley style success, because it just can't scale that way. "Food delivery services" was never going to be a silicon valley style success, because it just can't scale that way.

They have different models. WeWork gets a long-term lease for a property, refurbishes it and subleases it to tenants.

Neo taxi and food delivery companies are just matching apps that connect sellers with buyers and, in case of taxis, set prices.

Adding or removing a new service provider doesn’t have as much sunk costs as leasing a giant office space for several years.

Re: WeWork has frittered away $46.7B in value as the stock sinks below ¢50

#23

Post by polygamous_bat »

jarym wrote: post #5

Yes its a huge value loss but isn't this part of the VC model - invest in some companies knowing most will probably whither away in one way or another but a few will hit it out the park? The article mentions Benchmark and Insight have done ok in their other investments. Softbank though is a bit of an outlier - maybe it was a one-hit-wonder with Alibaba. They don't appear to have invested like other VCs at any rate.

One new theory is that the new VC model, as postulated in Venture Predation [0] is to create the illusion of potential to success so that you can dump your shares on the market at a sky high price. After that, VCs don't care if the company loses $50B in value, they already had their exit.

[0] https://news.ycombinator.com/item?id=36003096

Re: WeWork has frittered away $46.7B in value as the stock sinks below ¢50

#25

Post by juujian »

jfengel wrote: post #3

Was anything of value lost? The idea, as I understand it, was co-working spaces. They were there to optimize that, extracting the maximum profit in the way they leased stuff. Ok, fine. Is co-working still going on? Has something desirable been lost? Were they creating any value that couldn't be recreated by someone else. I can't care one way or another about fake valuation of market cap. But I do care if work is gett…

One could speculate whether things would have turned out differently if Covid and the raise of the home office had not happened? If Covid emptied out WeWork's spaces like it cleared out corporate HQs, companies probably just dropped all those contracts and stopped paying WeWork?

Re: WeWork has frittered away $46.7B in value as the stock sinks below ¢50

#26

Post by scarface74 »

heywhatupboys wrote: post #9
AndrewDucker wrote: post #2

It never had that much value, it just made it look like it did for long enough to get people to invest in it at vastly inflated prices. "Renting offices to work in" was never going to be a silicon valley style success, because it just can't scale that way.

"Taxi services" was never going to be a silicon valley style success, because it just can't scale that way. "Food delivery services" was never going to be a silicon valley style success, because it just can't scale that way.

You realize that in both of your examples, the companies are losing billions?

Re: WeWork has frittered away $46.7B in value as the stock sinks below ¢50

#27

Post by [deleted] »

heywhatupboys wrote: post #9
AndrewDucker wrote: post #2

It never had that much value, it just made it look like it did for long enough to get people to invest in it at vastly inflated prices. "Renting offices to work in" was never going to be a silicon valley style success, because it just can't scale that way.

"Taxi services" was never going to be a silicon valley style success, because it just can't scale that way. "Food delivery services" was never going to be a silicon valley style success, because it just can't scale that way.

[deleted]

Re: WeWork has frittered away $46.7B in value as the stock sinks below ¢50

#28

Post by belter »

AndrewDucker wrote: post #2

It never had that much value, it just made it look like it did for long enough to get people to invest in it at vastly inflated prices. "Renting offices to work in" was never going to be a silicon valley style success, because it just can't scale that way.

Specially because those offices were so noisy you could never get any work done. Best places however for finding a date...

"What people actually do at WeWork" - https://news.ycombinator.com/item?id=16292423

Re: WeWork has frittered away $46.7B in value as the stock sinks below ¢50

#29

Post by sokoloff »

CPLX wrote: post #4
AndrewDucker wrote: post #2

It never had that much value, it just made it look like it did for long enough to get people to invest in it at vastly inflated prices. "Renting offices to work in" was never going to be a silicon valley style success, because it just can't scale that way.

I mean if it used to be a very large pile of US currency then yes, it definitely had a lot of value that was apparently destroyed.

It never was a large pile of US currency (at least nowhere near as large as the peak of last_price * shares_outstanding would suggest).

If you today form a company having 1 billion and 1 shares and I agree to buy 1 share from you for a dollar, you aren’t a billionaire.

Re: WeWork has frittered away $46.7B in value as the stock sinks below ¢50

#30

Post by AndrewDucker »

heywhatupboys wrote: post #9
AndrewDucker wrote: post #2

It never had that much value, it just made it look like it did for long enough to get people to invest in it at vastly inflated prices. "Renting offices to work in" was never going to be a silicon valley style success, because it just can't scale that way.

"Taxi services" was never going to be a silicon valley style success, because it just can't scale that way. "Food delivery services" was never going to be a silicon valley style success, because it just can't scale that way.

Uber has made losses every year, and only works because it is supported by VC money: https://fourweekmba.com/uber-losses-by-year/

Deliveroo, likewise: https://www.businessofapps.com/data/deliveroo-statistics/

These are not successful companies, except insofar as they are very successful at handing out investor money.

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