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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

#91

Post by bluepizza »

kibwen wrote: post #57
Hamuko wrote: post #53

Earlier quoted context omitted.

Construction companies?

'The parable of the broken window was introduced by French economist Frédéric Bastiat in his 1850 essay "That Which We See and That Which We Do Not See" ("Ce qu'on voit et ce qu'on ne voit pas") to illustrate why destruction, and the money spent to recover from destruction, is not actually a net benefit to society.' https://en.m.wikipedia.org/wiki/Parable_of_the_broken_window

Five years in University and never heard of this essay, not even in passing! Thanks for sharing.

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

#92

Post by zzbn00 »

helsinkiandrew wrote: post #69
IshKebab wrote: post #47

Earlier quoted context omitted.

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 $…

The linked document writes: "Net loss attributable to Uber Technologies, Inc. was $157 million"

The could have been profitable maybe if they didn't spend ~$400million on stock based comp!

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

#93

Post by ericmcer »

lefstathiou wrote: post #72

I’ve ridden this stock down almost all the way (came in at $5 then 2.50 then again at $0.50). I am a pretty bad investor in that my top criteria is to buy stocks that produce a good or service I love and then stick with them a long time. As an operator WeWork adds so much value to us as we staff up all over the world. I love being able to go into any city and have a fun energetic and aesthetically beautiful environme…

But surely now at .21…

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

#94

Post by BulgarianIdiot »

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.

Explain why. It’s literally Uber for offices. It could’ve worked if managed right.

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

#95

Post by dkarl »

belter wrote: post #28
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

Coworking in general is a hideous working environment. The offices are fishbowls. There's no privacy. It's worse than open plan offices, because at least at the office, everybody works for the same company.

The only times I've found decent coworking spaces, they've been ad-hoc affairs to make use of an old building on cheap real estate. No software startups, nobody chasing VC money, no espresso machines, no free snacks (or maybe just a few sad granola bars for emergencies), just a solid wooden door, wifi, and natural light from a window. I don't think arrangements like that last, though.

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

#96

Post by [deleted] »

bluepizza wrote: post #63
fallingknife wrote: post #11

Earlier quoted context omitted.

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

[deleted]

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

#97

Post by fallingknife »

gchamonlive wrote: post #44
fallingknife wrote: post #11

Earlier quoted context omitted.

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

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

I said losing money doesn't destroy wealth. Destroying a city absolutely does.

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

#98

Post by mannykannot »

bluepizza wrote: post #85
UncleEntity wrote: post #81

Earlier quoted context omitted.

> Nobody else picked up those 99 dollars. Except the person who sold the stock for $100.

Person A holds 1 stock, valued at 100. Person A sells 1 stock to person B. Now Person A holds 100 in cash, and 0 in assets. Person B now holds 0 in cash, and 100 in assets. Fast forward 5 years. The stock price has crashed to 1 dollar. Person A still holds 100 in cash and 0 in assets. Person B holds 0 in cash, and 1 in assets. There was no transfer of 99 dollars back from Person B to Person A. Person A's holdings wer…

> Money doesn't travel back in time.

Correct - the transfer happened when you bought the stock. What you have lost is the expectation of getting it back (or at least the expectation of getting it back today.)

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

#99

Post by AndrewDucker »

BulgarianIdiot wrote: post #94
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.

Explain why. It’s literally Uber for offices. It could’ve worked if managed right.

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

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

#100

Post by bluepizza »

emacsen wrote: post #87
bluepizza wrote: post #63

Earlier quoted context omitted.

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

Unrelated to this is the distinction between money and wealth. The challenge for a company like Weework is that it's hard to identify what wealth they generate- at least for me. In other words, what are they making (goods) or doing (services) that provides value to the world (wealth). I suppose they'd say that their core value is making it easy to rent space quickly. This is certainly providing some value, but I hard…

It's simpler than that! They just need to charge more than they spend. The fundamental economics of WeWork never worked because they were a con by its founder, who used WeWork to buy buildings in his name and rent them back to WeWork, amongst other financially boneheaded decisions. WeWork was never meant to be a successful business, it was meant to enrich the founder.

Post founder, WeWork was finding itself as a scalable office provider, where companies were willing to pay a premium for a flexible contract, and add or remove seats as needed. It was an interesting idea, and there were signs of growth. Then COVID happened. I'm surprised they are even still operating.

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