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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

#161

Post by pessimizer »

kgwgk wrote: post #103
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.

It never had that much value but it has taken $22 billion of perfectly valuable money and set it on fire: "WeWork has raised a total of $22.2B in funding over 23 rounds." https://www.crunchbase.com/organization/wework/investor_fina...

I'm sure that plenty of that $22B came from the sale of other inflated assets to buy into WeWork. WeWork isn't the only scam out there; the economy seems largely dominated by scams (things whose values are determined by their moment by moment success in hyping bullshit) and cons (things that make money by providing services enabling the hyping of bullshit.)

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

#162

Post by wongarsu »

neilk wrote: post #119
BulgarianIdiot wrote: post #94

Earlier quoted context omitted.

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

It’s not Uber for Offices. It’s AWS for offices. The AWS bet is that some companies, especially when starting out, will pay a high premium to not have to manage certain physical resources, and to have the flexibility to scale up or down easily.

Which makes sense. Startups don't like signing 5-year lease agreements, so renting individual offices with all infrastructure taken care off is very attractive, and there are lots of companies offering that. But WeWork tried to sell a very specific brand of that, notably open-plan workspace with great interior design. Which is the opposite of "cheap office space where people can get stuff done", putting them in a tough spot when money isn't plentiful for startups. And it didn't help that was run like a Silicon Valley startup, but in a business where there are very little efficiencies of scale. Just about anyone can start a viable local competitor, allowing the market to adapt far quicker than any one company can.

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

#163

Post by the_mitsuhiko »

ethbr0 wrote: post #104
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

In order for the stock "price" to move, somebody sold. Stocks don't reprice without transactions.

The price can go to zero with no transaction taking place. And commonly does so.

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

#165

Post by TheCleric »

barelyauser wrote: post #156
Ekaros wrote: post #146

Earlier quoted context omitted.

Is success making lot of money for yourself. Or building a business that in general makes money and world a better place. That is generates societal wealth.

Success is personal. If your goal is to increase the amount of wealth for everyone then go for it. With that said, remember the following. While the economy is not zero sum and we can increase the amount of wealth in the world, power is zero sum. Power is finite and very scarce. You can create tremendous wealth and later find out it ended in the hand of a single person. And that person is not willing to share.

So would you have considered Bernie Madoff successful?

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

#166

Post by dougSF70 »

polygamous_bat wrote: post #23
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

This is exactly what some VC firms do. They are interested in generating returns for their investors, if the company trades to zero after an IPO they will have already generated a significant return.

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

#167

Post by lefstathiou »

fintereseted wrote: post #153
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…

Interesting, didn't short it? I see that you're an operator of a fintech info/news company? What sort of analysis did you do on WeWork? P.S. Is the about link in your profile correct? https://finsight.com/about/our-products seems to 404.

In full transparency I didn’t do much analysis. At $5 it was trading at 1-2x revenue growing at 20% in a horrible market with a great operator. The issue is too maturities and running out of cash.

Thank you for the note on the link, updated it.

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

#168

Post by mjmsmith »

"Well obviously there will be a Harvard Business School case study about WeWork, but what will it say? What is the lesson? It’s a good lesson, right? A lot of kids starting at Harvard Business School next fall will be hanging up posters of Adam Neumann in their dorm rooms. Neumann, the founder of WeWork, will walk away from this corporate bonfire with a billion dollars and a bunch of fancy houses. His great-grandchildren will be prominent philanthropists with their names on museums and universities, the strange origin of their fortunes long forgotten. Neumann did a certain sort of capitalism—one with some cachet at HBS!—as well as anyone has ever done it. It is one thing to build a successful company that creates a lot of value and take some of that value for yourself; Neumann created a company that destroyed value at a blistering pace and nonetheless extracted a billion dollars for himself. He lit $10 billion of SoftBank’s money on fire and then went back to them and demanded a 10% commission. What an absolute legend."

-- https://www.bloomberg.com/opinion/articles/2019-10-23/how-do...

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

#169

Post by pessimizer »

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.

From a quick google, Uber may have lost something like $37 billion dollars.

$12B from 2014-2018 [https://www.statista.com/chart/17705/uber-revenue-costs-and-...]

$25B from 2019-2022 [https://therideshareguy.com/uber-statistics/]

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

#170

Post by lefstathiou »

potatolicious wrote: post #148
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…

> "I struggle to rationalize how companies wouldn’t rather utilize flex space as needed for group huddles than commit to long term leases." Because larger companies have a stable enough need for space, even in the remote realm, to make it worthwhile to have long-term leases. Even if offices become group-meetup spaces rather than more traditional desk space, it still makes sense to run your own if your scale justifies…

That’s what I got wrong. You outgrow a WeWork at about 8-10 people which is where customers are most stable. I assumed they could adapt but the economics aren’t there.
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