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WeWork Warns of Possible Bankruptcy

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Re: WeWork Warns of Possible Bankruptcy

#111

Post by moate »

jt2190 wrote: post #60
fredgrott wrote: post #33

Earlier quoted context omitted.

We need to be more detailed about this as it highlights a demographics problem underlying it.... 1. Free Money was the tail end of boomers investments pools 2. There will be a 12-year gap until the next investments pools increase from the new workers entering the working market. 3. Next investments pool increase from the new worker cohorts group will be smaller than the boomers. All this indicates that the strategy o…

> There will be a 12-year gap until the next investments pools increase from the new workers entering the working market. Why 12 years?

Because when we cast the bloody knucklebones the spirts foretold it, 6 and 6 years shall it be 'til the money runs free.

Re: WeWork Warns of Possible Bankruptcy

#112

Post by geodel »

hn_throwaway_99 wrote: post #95
benjaminwootton wrote: post #83

Earlier quoted context omitted.

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. Why do people think selling dollars for 75 cents is some incredible achievement to be lauded?

He is the role model for quite a lot of people here. See those half-ass CRUD apps launch as world changing Cloud SAAS everyday.

Re: WeWork Warns of Possible Bankruptcy

#113

Post by shrubble »

rchaud wrote: post #35

VC capitalism over the past decade resembles the free spending era of Communist central planners tasked with rapidly industrializing their economies. 1) Dump enormous amounts of zero-interest capital into {{ sector }} 2) Entrust leadership to charismatic politicians rather than domain experts (Adam Neumann) 3) Craft a PR narrative emphasizing innovation and diminishing critics (Softbank "Vision Fund", "swinging for t…

Your accurate post made me think of a great blog title... "A Canticle For Potemkin"

Re: WeWork Warns of Possible Bankruptcy

#114

Post by ethbr0 »

itsoktocry wrote: post #77
JacobAldridge wrote: post #51

Earlier quoted context omitted.

"Neumann’s ability to negotiate such rich terms was helped by the fact that his shareholdings controlled 10 times the votes of a normal shareholder, and he was able to argue for a higher price to cede control." Correctly or, more likely, not - it seems the payoff was made in early 2021 at a time when valuations were soaring and there was a renewed push for an IPO. Neumann could have blocked that. If I'm parsing a qui…

> A snapshot at that time could be used to argue they paid Neumann $x00 million to realise a multi-Billion dollar valuation and $1Bn+ growth in market cap. This makes no sense to me. Why would you pay hundreds of millions of dollars to someone for a paper valuation and market cap? It was all meaningless.

Liquidity. It's the difference between initial equity holders being able to sell and not.

Re: WeWork Warns of Possible Bankruptcy

#115

Post by ethbr0 »

notahacker wrote: post #91
JacobAldridge wrote: post #51

Earlier quoted context omitted.

"Neumann’s ability to negotiate such rich terms was helped by the fact that his shareholdings controlled 10 times the votes of a normal shareholder, and he was able to argue for a higher price to cede control." Correctly or, more likely, not - it seems the payoff was made in early 2021 at a time when valuations were soaring and there was a renewed push for an IPO. Neumann could have blocked that. If I'm parsing a qui…

> at a time when valuations were soaring and there was a renewed push for an IPO. Neumann could have blocked that. "We invested in a company structured so that the CEO could hold us to ransom, and agreed the bad terms because we thought the CEO would have breached his fiduciary duty to other shareholders and blocked advantageous exits if we didn't pay his ransom first" doesn't sound any better...

But not illegal, no?

I actually kind of respect Neumann. Not in a moral/ethical way, of course, but in a defend-yourself-at-all-times way.

He never would have gotten that payout if he hadn't legally fortified his position like he did, and then successfully maintained it through SoftBank's initial due diligence.

"Heads, I win. Tails, I win." type stuff.

Re: WeWork Warns of Possible Bankruptcy

#116

Post by anagri »

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…

just glad that the 2019 IPO didn't materialize, otherwise the innocent retail shareholders would have paid for all the nuisance

Re: WeWork Warns of Possible Bankruptcy

#117

Post by cgeier »

weard_beard wrote: post #80
cgeier wrote: post #64

I'm somewhat surprised by this. I'm currently working out of a WeWork and not only was it hard to get an office there, but they are constantly expanding the location I'm in and just opened the fourth location in a 1.5km radius. Cost is also rather high for a very small office (supposed to be for 4 persons, but if with 3 people it feels very crowded). The business of renting office space en masse and renting it out in…

Let's say I start a lemonade stand. I sell lemonade for a pretty big markup... say €3 a cup. I add lots of ice to it as well, this is not a good deal for lemonade for the customer... but people seem REALLY thirsty and I am getting a good flow of customers. A local businessman approaches me and says he will lend me money to expand operations. He offers me €5 million. I take his money and I use €1 million to expand ope…

To stay in your metaphor: I'm saying I see long queues at all lemonade stands and lots of sold lemonade in my area. This perception doesn't fit with the lemonade business's (WeWork's) EBITDA being negative.

The value of assets (which I doubt WeWork has a lot to begin with, I would assume they rent as well) and the amount of debt doesn't factor in there.

Re: WeWork Warns of Possible Bankruptcy

#118

Post by nradov »

i_am_jl wrote: post #78
bhouston wrote: post #66

Earlier quoted context omitted.

SoftBank in particular seems to fund a lot of fraudsters. I wonder why? Just the number of total investments SoftBank makes or is there less DD? Just yesterday I saw this news: https://techcrunch.com/2023/08/04/softbank-sues-irl-over-ela...

DD? Softbank just throws gobs of money at companies with founders Masayoshi Son likes. Softbank's "investment strategy" would've ended the company decades ago if it didn't buy a quarter of Alibaba for $20m, a share that would end up being worth over $100b a few years ago.

It appears that SoftBank also made a huge profit on Sprint. Although it was less than they initially expected and took much longer to exit.

https://www.wsj.com/articles/softbanks-boss-bet-22-billion-o...

Re: WeWork Warns of Possible Bankruptcy

#119

Post by weard_beard »

cgeier wrote: post #117
weard_beard wrote: post #80

Earlier quoted context omitted.

Let's say I start a lemonade stand. I sell lemonade for a pretty big markup... say €3 a cup. I add lots of ice to it as well, this is not a good deal for lemonade for the customer... but people seem REALLY thirsty and I am getting a good flow of customers. A local businessman approaches me and says he will lend me money to expand operations. He offers me €5 million. I take his money and I use €1 million to expand ope…

To stay in your metaphor: I'm saying I see long queues at all lemonade stands and lots of sold lemonade in my area. This perception doesn't fit with the lemonade business's (WeWork's) EBITDA being negative. The value of assets (which I doubt WeWork has a lot to begin with, I would assume they rent as well) and the amount of debt doesn't factor in there.

I was under the impression that WeWork was basically a commercial real estate company moonlighting an office space renter. I thought they were primarily in the business of buying up and building as much commercial real estate as they could, and the work spaces were incidental to their actual business model. Kind of like how McDonalds isn't really in the business of selling burgers, but owning prime commercial real estate.

The value of commercial real estate is plummeting. I don't know how/if this is reflected in EBITDA.

Re: WeWork Warns of Possible Bankruptcy

#120

Post by xcdzvyn »

SQueeeeeL wrote: post #107
edgyquant wrote: post #90

Earlier quoted context omitted.

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 a…

If we're trying to define precise terms here, "free market" and "capitalism" don't overlap at all. Capitalism is a type of government, free markets are a (group of) polic[y/ies].

I don't see where the logic of your comment comes from either way though - capitalists are typically in favour of a free market, no? And typically the "purpose" of a free market is accruing wealth as part of a private enterprise?

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