Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

WeWork Warns of Possible Bankruptcy

cnbc.com

Post reply on HN
Print view View original

101–110 of 150 posts

Re: WeWork Warns of Possible Bankruptcy

#101

Post by lordnacho »

sarreph wrote: post #14

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…

> Go to the hot-desking spaces floors and you’ll find it bustling and sometimes not even possible to get a seat somewhere.

Weirdly I'm writing from a WeWork floor in central London that has about 3 people in a room sized for about 30. I've never seen it even half full, though I don't drop by very often.

Even the common areas have enough space to go sit in and have a meeting on demand.

The conference rooms are pretty busy however.

Re: WeWork Warns of Possible Bankruptcy

#102

Post by vasco »

bratgpttamer wrote: post #40
mirekrusin wrote: post #18

Earlier quoted context omitted.

They probably enter into long term lease for the building they can’t get out overnight?

I do recall hearing that this is/was precisely their business model: given that rent always* goes up (and never* down), lock in rates with a 10- or 20-year lease, wait for rent to increase for other people, [???], profit.

Rent inflation is built-in to every single real estate investment model ever. Even individuals getting a first property to rent out tend to model out rent increase when calculating yield over more than a few years.

Re: WeWork Warns of Possible Bankruptcy

#103

Post by zer8k »

hn_throwaway_99 wrote: post #98
bhouston wrote: post #37

I do not understand why Adam Neumann got that massive exit settlement from We Work? > WeWork founder Adam Neumann received $245m in company stock [....] In addition to the $245m grant, Neumann received $200m in cash, was able to refinance $432m in debt on favorable terms, and allowed a finance company controlled by the former chief executive to sell $578m in WeWork stock. [1] That guy got incredibly rich creating a c…

Still more amazing to me is that he got a16z to invest 350 million into his new real estate debacle just after all this. This dude must really be a master hypnotist or something.

I've been around a few of these people in my life (albeit not nearly as successful). One guy in particular got people to invest millions in his sinking ships. Some people have a reality distortion field around them. Pair that with a half decent pedigree (school, neighborhood, city) and while money was cheap it was fairly easy for them to get whatever they wanted.

It's sometimes surprising how shocking simply knowing people is.

Re: WeWork Warns of Possible Bankruptcy

#105

Post by geodel »

hn_throwaway_99 wrote: post #98
bhouston wrote: post #37

I do not understand why Adam Neumann got that massive exit settlement from We Work? > WeWork founder Adam Neumann received $245m in company stock [....] In addition to the $245m grant, Neumann received $200m in cash, was able to refinance $432m in debt on favorable terms, and allowed a finance company controlled by the former chief executive to sell $578m in WeWork stock. [1] That guy got incredibly rich creating a c…

Still more amazing to me is that he got a16z to invest 350 million into his new real estate debacle just after all this. This dude must really be a master hypnotist or something.

Nah, this time Andreessen thought real estate is really eating the world :) So jump in early.

Re: WeWork Warns of Possible Bankruptcy

#107

Post by SQueeeeeL »

edgyquant wrote: post #90
antihero wrote: post #88

Earlier quoted context omitted.

This is just capitalism working as intended.

No, quite the opposite actually

The issue pointed out by these two comments come from a conflation of vocabulary (which is typically intentional at least at some point in the education). A truly "free market" would ensure that things like WeWork wouldn't happen because the ultimate material inputs and outputs of the company don't square. "Capitalism" is the seeking of profit at the expense of all others, where having a viable company no longer is an objective in itself but simply is a means to increase personal wealth. In such a system, WeWork makes a lot of sense because the long term solvency of the company does not impact how the market measures it's success.

Thank you for coming to my Ted Talk

Re: WeWork Warns of Possible Bankruptcy

#108

Post by phone8675309 »

antihero wrote: post #88
itsoktocry wrote: post #72

Earlier quoted context omitted.

> That guy got incredibly rich creating a company that was clearly not viable and seems likely to bankrupt. WeWork is an extreme case, but this kind of thing happens with tech companies all the time. Why do you think people in Silicon Valley equate an "exit" with success? Because at that point the insiders are paid out. What else matters? Look at companies like Uber, Coinbase or Snap. Even Tesla. Insiders have accumu…

This is just capitalism working as intended.

I agree, but I think we probably disagree about whether or not this is a good thing

Re: WeWork Warns of Possible Bankruptcy

#109

Post by bhouston »

benjaminwootton wrote: post #83
bhouston wrote: post #37

I do not understand why Adam Neumann got that massive exit settlement from We Work? > WeWork founder Adam Neumann received $245m in company stock [....] In addition to the $245m grant, Neumann received $200m in cash, was able to refinance $432m in debt on favorable terms, and allowed a finance company controlled by the former chief executive to sell $578m in WeWork stock. [1] That guy got incredibly rich creating a c…

He built an enormous global business and brand, and the investors wanted to buy his shares and push him out in a transparent negotiated commercial transaction. He deserved every penny of it as far as I can see. What’s the alternative? That his stock and voting rights went to SoftBank for free?

> He built an enormous global business and brand

Brands built upon selling product for less than it is worth are easy to build up. That isn't a real business though, it is just VC-funded make believe.

> What’s the alternative? That his stock and voting rights

Wouldn't it have been better back when WeWork's IPO failed to materialize in 2019 for SoftBank to just stop investing in WeWork it dropped from a planned $100B to $5B in a span of a year or so? And then SoftBank continued to invest to gain control and keep it afloat. Definitely a situation where someone is throwing good money after bad. Should have just left it for dead then.

That is the alternative. And it would have been best for the investors for sure.

In the end SoftBank just offloaded this turkey to the public via a SPAC merger. Did SoftBank end up making any money off this at all? I suspect there was no liquidity for the shares in this SPAC thus I bet they recouped almost nothing from this whole debacle.

Re: WeWork Warns of Possible Bankruptcy

#110

Post by vasco »

yieldcrv wrote: post #19
throwoutway wrote: post #3

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).

I had several WeWork employees in my friend groups in SF 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…

It is difficult to get a man to understand something, when his salary depends upon his not understanding it.
Post reply on HN