WeWork Gets a Visit from Financial Reality
bloomberg.com
WeWork Gets a Visit from Financial Reality
1–10 of 380 posts
Re: WeWork Gets a Visit from Financial Reality
#2tl;dr: Softbank/VisonFund investors told Softbank that they want to concentrate investments on "technology bets". Since WeWork is a real estate company and not a technology company Softbank will invest less in their next financing round (though not so little that it will be a down round)
Re: WeWork Gets a Visit from Financial Reality
#3Crazy valuations for startups like WeWork remind me of the Dot Com bubble, when companies put up a shiny new "high tech" facade in front of entirely traditional business models, then expected to be valued at a large multiple of a normal company with that well trodden value proposition.
We all know how well that ended.
Companies that want the sky-high valuations of innovative high tech should be, you know, actually innovative and high tech. Just because your company has web 2.0 trappings (or ends in .com) doesn't automatically entitle you to "high tech" and "innovative" valuations.
Developing a new non-obvious technology would be a good start.
Re: WeWork Gets a Visit from Financial Reality
#4>The Gulf investors backing the Vision Fund seem to have decided that WeWork is not a tech bet but simply an aggressive punt on real estate.
This is the bogey man of a huge number of current 'tech startups' - What if it turns out Tesla really are a car company! Or if We Work are actually an office rental company! OR gasp Uber is a cab company! (1)
We now have a glut of companies operating in traditional markets that have valuations that would indicate they'll be as big or bigger than their biggest competitors. IWG is a comparable company to WeWork, has £2.35n revenue and £1.95Bn market cap. Wework has slightly lower revenue but is being lined up for a £20Bn valuation. Not only this, but WeWork are going to learn about the cyclical nature of office rental revenue.
The key for these companies is to show concrete indicators that their business is actually different from the companies they're disrupting and We Work has done an absolutely rubbish job of that so far.
(1) I want to be clear I don't think all those examples have nothing to differentiate them, but it's closer than some people might like to think.
Re: WeWork Gets a Visit from Financial Reality
#5>The Gulf investors backing the Vision Fund seem to have decided that WeWork is not a tech bet but simply an aggressive punt on real estate. This is the bogey man of a huge number of current 'tech startups' - What if it turns out Tesla really are a car company! Or if We Work are actually an office rental company! OR gasp Uber is a cab company! (1) We now have a glut of companies operating in traditional markets that…
In 1999 there was an email going round about how ridiculous dotcom valuations were. Taking Amazon, I think, as an example it said it would have to earn more than Kodak, Boeing, Caterpillar etc to ever be worth it's valuation.
There was a general sense of "it's just a bookstore".
Now I know everything is more mature and the situation is different, but I also remember feeling very confident that Amazon was waaay overvalued.
Re: WeWork Gets a Visit from Financial Reality
#6"The Gulf investors backing the Vision Fund seem to have decided that WeWork is not a tech bet but simply an aggressive punt on real estate."
If you have earlier invested in WeWork as a tech startup then one should be questioning your investment strategies and research methods.
Re: WeWork Gets a Visit from Financial Reality
#7>The Gulf investors backing the Vision Fund seem to have decided that WeWork is not a tech bet but simply an aggressive punt on real estate. This is the bogey man of a huge number of current 'tech startups' - What if it turns out Tesla really are a car company! Or if We Work are actually an office rental company! OR gasp Uber is a cab company! (1) We now have a glut of companies operating in traditional markets that…
In 1999 there was an email going round about how ridiculous dotcom valuations were. Taking Amazon, I think, as an example it said it would have to earn more than Kodak, Boeing, Caterpillar etc to ever be worth it's valuation. There was a general sense of "it's just a bookstore". Now I know everything is more mature and the situation is different, but I also remember feeling very confident that Amazon was waaay overva…
Pets.com was also overvalued, right? It's easy to see the winners in hindsight.
Re: WeWork Gets a Visit from Financial Reality
#8>The Gulf investors backing the Vision Fund seem to have decided that WeWork is not a tech bet but simply an aggressive punt on real estate. This is the bogey man of a huge number of current 'tech startups' - What if it turns out Tesla really are a car company! Or if We Work are actually an office rental company! OR gasp Uber is a cab company! (1) We now have a glut of companies operating in traditional markets that…
In 1999 there was an email going round about how ridiculous dotcom valuations were. Taking Amazon, I think, as an example it said it would have to earn more than Kodak, Boeing, Caterpillar etc to ever be worth it's valuation. There was a general sense of "it's just a bookstore". Now I know everything is more mature and the situation is different, but I also remember feeling very confident that Amazon was waaay overva…
On the flip side, if it wasn't Amazon mentioned but pets.com, they were entirely right.
Re: WeWork Gets a Visit from Financial Reality
#9I feel like WeWork would be one of the first companies to go under in case a recession hits the US market. Everyone who works there is probably going to decide en masse that they can do the same things from home or a Starbucks
Re: WeWork Gets a Visit from Financial Reality
#10>The Gulf investors backing the Vision Fund seem to have decided that WeWork is not a tech bet but simply an aggressive punt on real estate. This is the bogey man of a huge number of current 'tech startups' - What if it turns out Tesla really are a car company! Or if We Work are actually an office rental company! OR gasp Uber is a cab company! (1) We now have a glut of companies operating in traditional markets that…
I agree that Tesla is probably just a car company but no american cab company operates in 72 countries outside of america though.