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To be fair, WeWork is just another roll of the dice company from the Uber era of free money. Let's pump it up and become too-big-to-fail! It appears WeWork wasn't big enough..
And they can blame COVID all they want, but the business model was already showing sights of failure before 2020. Yes, COVID accelerated this but it was not the cause.
The story of WeWork is fascinating and sad to watch (for the employees). Adam got his but his employees didn't. The financial numbers are pretty sad too. - Market cap below $500 million. - Lost $700 million in 6 months this year - Lost $2.3 billion in 2022 - Roughly 3 billion in debt - Total liquidity of only $680 million (only 1/3 is cash).
- Adam Neumann's exit package $445 million
The story of WeWork is fascinating and sad to watch (for the employees). Adam got his but his employees didn't. The financial numbers are pretty sad too. - Market cap below $500 million. - Lost $700 million in 6 months this year - Lost $2.3 billion in 2022 - Roughly 3 billion in debt - Total liquidity of only $680 million (only 1/3 is cash).
What is crazy is that he was able to raise 350 millions from a16z for what is basically a simple property management company. After all the sh*t he did. And then you go to a16z with an idea, and they reject it because it is not innovative enough. Then VCs wonder why 80% of their investments fail to produce the expected money on average. https://techcrunch.com/2022/08/16/how-a16zs-investment-into-...
https://www.bloomberg.com/opinion/articles/2019-08-07/moviep...
Having rented multiple dedicated offices from WeWork I can attest that the corridors are become more and more like a post-apocalyptic landscape as the tenants — no longer taking advantage of introductory rents — move out one after the other. Go to the hot-desking spaces floors and you’ll find it bustling and sometimes not even possible to get a seat somewhere.
Why they haven’t aggressively cut underperforming locations and consolidated more hot-desking space into the better buildings is beyond me. Especially in the current work environment where arrangements with companies are flexible and the line between home and work becomes ever blurred. It seems like the perfect base to start on to build a new offering for companies that can provide employees with hot-desks on a flexible basis.
They successfully got away with it, despite knowing that the business has hundreds of millions of dollars of losses pre-IPO, which was over $900M+ [0]; the biggest of all red flags as I said 4 years ago. [1]
This company could only exist in a cheap money era with decades long quantitate easing. Now just look at the ship sinking faster as the interest rates are now much higher with no cheap money this time.
WeWork is the gold standard of unprofitable companies who are good at losing money whilst pretending to be a 'tech company' or 'tech startup' and was just used as a vehicle for an IPO at an extremely inflated valuation before the bubble burst.
[0] https://www.cnbc.com/2019/08/14/wework-releases-s-1-filing-f...
In my opinion the writing for a way out of this mess has been on the wall for a long time now, post-Covid. This is with the only viable, but still heavily under-utilized product they have left: hot-desking and community workspaces. Having rented multiple dedicated offices from WeWork I can attest that the corridors are become more and more like a post-apocalyptic landscape as the tenants — no longer taking advantage…
The story of WeWork is fascinating and sad to watch (for the employees). Adam got his but his employees didn't. The financial numbers are pretty sad too. - Market cap below $500 million. - Lost $700 million in 6 months this year - Lost $2.3 billion in 2022 - Roughly 3 billion in debt - Total liquidity of only $680 million (only 1/3 is cash).
they were gullible as hell and were educated people that couldn't understand a single word of Wall Street Journal and the investment banking community's dunking and pile-ons about WeWork
they couldn't understand the tech community's dunking and pile-ons about WeWork
everyone was saying "why are investors buying shares of this company at prices as if its a tech company"
employees were like "my first tech company omg guys I love shares and family"
just collect a paycheck, its fine, but the hopium was flat out dumb. its one thing to be at a startup that never tells you its valuation or gives you a clear answer about the strike price of your options in a way for you to model an outcome, its another thing for the financials to be presented clear as day and put blinders on.