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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

#61

Post by CPLX »

shuntress wrote: post #34
CPLX wrote: post #20

Earlier quoted context omitted.

Not really. For example there’s a pretty noticeable difference in the amount of wealth a society will have if they choose to build 890,721 intricate snowmen on the island of Manhattan instead of housing, power plants, and infrastructure.

Potential future wealth is not "destroyed" when we take actions which do not achieve that potential.

Yes but present wealth is destroyed when resources are deployed unproductively.

This concept isn’t particularly subtle or arguable. If you have a lot of food and you are wealthy and then you let it spoil you’re less wealthy.

Nobody else got that wealth (assuming you don’t count the microbes) and absent another source of resources then you are also dead.

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

#62

Post by pclmulqdq »

IshKebab wrote: post #47
AndrewDucker wrote: post #30

Earlier quoted context omitted.

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.

I feel like Uber's losses are deliberate at this point, like Amazon's lack of profit. If you look up their losses per journey it's something completely trivial like 50c. Uber's customers are not that price sensitive so if they really did want to make a profit they could probably just raise their prices a little bit.

With Amazon, you could point to what they were spending the money on. With Uber, it's a lot less clear what they are doing other than gaining market share with discounts. They are going to lose a lot of that market share when the discounts go away.

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

#63

Post by bluepizza »

fallingknife wrote: post #11
CPLX wrote: post #4

Earlier quoted context omitted.

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.

Losing money doesn't destroy wealth. It just transfers it from one place to another.

If you buy a stock for 100 dollars, and due to a series of bad results which led to price adjustments, the stock is now worth 1 dollar, you lost 99 dollars. Nobody else picked up those 99 dollars.

Asset depreciation is a fundamental concept that you should be familiar with, as it influences several aspects of your personal finance: https://www.investopedia.com/terms/d/depreciation.asp

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

#64

Post by Ensorceled »

ape4 wrote: post #21
heywhatupboys wrote: post #9

Earlier quoted context omitted.

"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.

WeWork doesn't own much of it's property, it leases and rerents.

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

#65

Post by dangwhy »

Hamuko wrote: post #50
diceduckmonk wrote: post #24

I think the market cap is less than the amount Adam walked away with.

Elizabeth Holmes should've picked an easier industry than healthcare considering Adam Neumann was selling hot air and made out like a fucking thief.

i don't know if it was 'hot air' . My company was one of their customers and our office space was decent.

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

#66

Post by uoaei »

sokoloff wrote: post #29
CPLX wrote: post #4

Earlier quoted context omitted.

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.

Yeah, finance can be messy for those who just get into it at the smaller to medium scales but who only have some experience in analyzing investments at the micro scales without really understanding the macro scale economics behind it.

If the stock market responds to sales by spooking investors who then sell at lower prices, then the market cap was always a scam. Exchange value of the collection of stock shares for the shareholders is actually not last_price * outstanding_shares but a much smaller amount that exponentially decreases as people sell out.

The use value for the company too is not represented by market cap because short term speculators aren't going to be around long enough to allow you to realize those investments as assets, and anyway there's a large contingent of shareholders who either don't understand or don't agree on company leadership's decisions, so the true value is much lower than depicted.

It's basic economics. Value is what can be done with the set of assets and the collective beliefs held about them, not the projection of such from some pseudo-equilibrium state.

However, big finance depends on you either believing their falsehoods or getting out quick enough that the grift is completed so that average Joes are left holding the bag. They're not on your side, so why continue playing by their rules?

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

#67

Post by kibwen »

pcurve wrote: post #42

"He's back with a new startup that raised $350 million from the VC giant Andreessen Horowitz in August, 2022 — its biggest check ever " Someone once said, SV values bigger failures than small success. Fail big.

And most importantly, fail upward.

The fact that this legendary con man has ultimately suffered no consequences for his actions demonstrates how the market is fatally irrational.

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

#68

Post by sbrother »

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…

Coworking is absolutely still going on. My wife and I go to https://kiln.com/ which is a fantastic option if you are in SoCal or Utah. They seem to be thriving. The workspaces are fantastic, they get us all the benefits of going to a (very nice) office with none of the downsides (we choose when to go, and they're a five minute bike ride from the kids school.) Lots of opportunities to meet other members, network, and a place to go to when we need high speed internet and an environment conducive to work. At $325/mo on SWE salaries it seems like a no-brainer.

But it will never be a good fit for VC funding. It's just a high quality, profitable small business with happy customers. The WeWork valuation never made any sense.

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

#69

Post by helsinkiandrew »

IshKebab wrote: post #47
AndrewDucker wrote: post #30

Earlier quoted context omitted.

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.

I feel like Uber's losses are deliberate at this point, like Amazon's lack of profit. If you look up their losses per journey it's something completely trivial like 50c. Uber's customers are not that price sensitive so if they really did want to make a profit they could probably just raise their prices a little bit.

It's actually profitable https://www.sec.gov/Archives/edgar/data/1543151/000154315123...

But I think the consensus is that (unlike Amazon) there is no more scale for them to reach which would make their business model profitable enough to justify the valuation - their only route to large profits is to destroy the rest of the competition and raise prices.

"On Monday morning, an Uber from Manhattan to JFK Airport was $100—nearly double the fixed yellow cab rate. But good luck finding a yellow cab" https://slate.com/business/2022/05/uber-subsidy-lyft-cheap-r...

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

#70

Post by bluepizza »

Hamuko wrote: post #53
gchamonlive wrote: post #44

Earlier quoted context omitted.

If wealth is not destroyed but transferred, where does it go after an earthquake?

Construction companies?

What if there is no reconstruction? Not every catastrophe is a catalyst for reconstruction.

If a house is destroyed in a fire, it loses its value as a house. Now you have the value of the land, which will be offset by the cost of clearing it. So the value of the land is below market. The asset has depreciated.

Large scale construction tends to be very good for the economy because it both increases economic activity (construction is expensive, and a lot of people get paid to do a lot of labor in the whole chain, from lamps to concrete to engineers to meal makers), and sets infrastructure that will be used by highly productive companies (white collar offices) to make a lot of money.

But there is no value transfer from rubble to construction companies. That asset owner took a hit.

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