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

WeWork Bonds Drop Below Par for First Time Since IPO Filing

bloomberg.com

Post reply on HN
Print view View original

121–130 of 134 posts

Re: WeWork Bonds Drop Below Par for First Time Since IPO Filing

#121

Post by duxup »

tim333 wrote: post #120
duxup wrote: post #5

Earlier quoted context omitted.

I wonder what they sold their initial investors on? I've heard a lot of theories (cornering the market, the future of remote work) but I don't quite get what WeWork was selling folks on when it came to investing and evaluations that were so high in the first place.

From SoftBank's Son, the largest investor: >It is rare for Son, who casts a wide net with his startup investments, to commit so much resources to a single company. But he said WeWork is more than just a renter of office space: it is "something completely new that uses technology to build and network communities." >"WeWork is the next Alibaba," Son said, referring to SoftBank's early investment in the e-commerce compa…

Thank you...I wish I knew what he meant by that.

Re: WeWork Bonds Drop Below Par for First Time Since IPO Filing

#122

Post by baby »

linuxftw wrote: post #93
nradov wrote: post #29

Earlier quoted context omitted.

The vast majority of 401(k) money is in large-cap mutual funds which don't invest in IPOs.

Current top institutional holder: Vanguard Group [1]. It's almost like they specialize in mutual-funds and 401k's. 1: https://finance.yahoo.com/quote/SNAP/holders/

wow, can you explain to me how Snapchat ended up on a Vanguard index fund? Is it like a "new start up" index fund or something?

Re: WeWork Bonds Drop Below Par for First Time Since IPO Filing

#123

Post by skinnymuch »

TylerE wrote: post #105
bduerst wrote: post #67

Earlier quoted context omitted.

That's survivor bias though, isn't it? There are a ton of bad ideas and companies that sink all the time. WeWork isn't new or unique in this regard, for reasons you described. Just because you see a boat sink doesn't mean the other floating boats are going to start sinking as well.

WeWork is VERY big though. For instance, their market cap is 1.5x what Kodak peaked at.

Market cap is almost never used as the valuation of a privately held company. Their valuation which since around $17B has almost solely been funded by SoftBank and the venture fund? SoftBank took them from a $20B valuation with others to solo pushing them up to $47B over the course of less than 2 years. That doesn’t count as a market cap.

Re: WeWork Bonds Drop Below Par for First Time Since IPO Filing

#124

Post by skinnymuch »

JumpCrisscross wrote: post #36
duxup wrote: post #4

It just seems like WeWork took an existing business model of renting office space, went all VC and gathered a bunch of money and sky high evaluation (toss in some creepy insider dealing) ... and ... that's it. I know there were some theories on cornering the market, or getting some sort of huge buy in / contracts with companies hiring remote workers but for the most part there's plenty of office space (at least in my…

> It just seems like WeWork took an existing business model of renting office space, went all VC and gathered a bunch of money and sky high evaluation (toss in some creepy insider dealing) ... and ... that's it The nutty thing is WeWork could have worked as a well-executed business. The core thesis, that companies of all sizes appreciate the flexibility of spinning up and down remote workplaces as a variable (versus…

We was already being valued at around $17B in 2016 and 2017 before Masa came in and took it all the way to $47B. That $17B valuation was likely too high too so all the enabling blame isn’t on just Masa.

Side thing. I don’t know how things will work out, but SoftBank put in $9B and owns like 30% of the company. It’s valuation is below $20B now and who knows how low it’ll go. Or what will happen with them needing money. SoftBank and the fund are at best going to be out $4B. Is that what’s likely the case? That money is essentially flushed down the toilet for SB and their fund?

Re: WeWork Bonds Drop Below Par for First Time Since IPO Filing

#125

Post by skinnymuch »

goatinaboat wrote: post #61
chadash wrote: post #14

Earlier quoted context omitted.

> It just seems like WeWork took an existing business model of renting office space, went all VC and gathered a bunch of money and sky high evaluation (toss in some creepy insider dealing) ... and ... that's it. That is basically what they did, but they also marketed it really well and made the process seamless. Everyone points to Regus as an example of a company that already existed in WeWork's space, but as far as…

Before WeWork, most people weren't aware that coworking spaces were an option I remember co-working spaces and “live-work units” in London in the 1990’s. I’ll admit that WeWork has a certain cachet, Millenials can’t imagine anything cooler than getting an Uber from the AirBnB to the WeWork, but that’s just a fashion and they’ll move onto something else soon.

Yeah that broad stroke of millennials isn’t at all true.

Re: WeWork Bonds Drop Below Par for First Time Since IPO Filing

#126

Post by atombender »

sjtindell wrote: post #107
nabdab wrote: post #91

Earlier quoted context omitted.

Framing the entire market as “either you buy into this single obvious scam or everything falls apart” is extreme. WeWork has been a gamble throughout, and the latest antics just pushed investors from “yes its a bad investment long term but short term I’ll make a profit” into straight up “this bag is on fire and I’m sure it’s filled with shit so I’ll let someone else step on it”. Wework failing is not going to trigger…

For me as occasional observer, the first shot across the bow was the Uber S1. It seems to have made a lot of people pause and question the business models of other companies as well. Nobody jumping ship, but caution in the winds.

To throw caution to the winds means to be careless (you're throwing caution away). Is "caution in the wind" an actual phrase?

Re: WeWork Bonds Drop Below Par for First Time Since IPO Filing

#127

Post by nradov »

baby wrote: post #122
linuxftw wrote: post #93

Earlier quoted context omitted.

Current top institutional holder: Vanguard Group [1]. It's almost like they specialize in mutual-funds and 401k's. 1: https://finance.yahoo.com/quote/SNAP/holders/

wow, can you explain to me how Snapchat ended up on a Vanguard index fund? Is it like a "new start up" index fund or something?

Vanguard has some index funds like VTSMX that buy essentially every publicly traded US stock.

Re: WeWork Bonds Drop Below Par for First Time Since IPO Filing

#128

Post by mlthoughts2018 »

swoongoonz wrote: post #60
cm2012 wrote: post #50

Earlier quoted context omitted.

They seriously had forced summer camps? WTF?

it's not uncommon with hypey vc funded startups. I've gone to two different startup camps, it's very much so kool-aid drinking exercises

Note that in WeWork’s case it was not a “startup camp” like you mention, but an actual honest to God employee summer camp with mandatory attendance. Like a camp at a lake with archery & campfire stories, except everything is whitewashed with corporate retreat brainwashing.

Re: WeWork Bonds Drop Below Par for First Time Since IPO Filing

#129

Post by tim333 »

duxup wrote: post #121
tim333 wrote: post #120

Earlier quoted context omitted.

From SoftBank's Son, the largest investor: >It is rare for Son, who casts a wide net with his startup investments, to commit so much resources to a single company. But he said WeWork is more than just a renter of office space: it is "something completely new that uses technology to build and network communities." >"WeWork is the next Alibaba," Son said, referring to SoftBank's early investment in the e-commerce compa…

Thank you...I wish I knew what he meant by that.

Yes I'm not sure what "technology to build and network communities" actually is in terms of something that could be worth many billions.

Re: WeWork Bonds Drop Below Par for First Time Since IPO Filing

#130

Post by banannaise »

mtkd wrote: post #58
duxup wrote: post #4

It just seems like WeWork took an existing business model of renting office space, went all VC and gathered a bunch of money and sky high evaluation (toss in some creepy insider dealing) ... and ... that's it. I know there were some theories on cornering the market, or getting some sort of huge buy in / contracts with companies hiring remote workers but for the most part there's plenty of office space (at least in my…

IPO valuation aside -- it is premature to write the WeWork model off It could end up being a strong counter-cyclical model -- and outperforms as the economy tightens Traditional office space is a 2, 5, 10 year commitment and a pain to move things around -- with WeWork you're paying monthly and relocating geographically is simple CFOs will often look to pay more per month for shorter commitments which fit well with bu…

If everyone moves from long-term office spaces to short-term ones, at the same time that overall office demand declines, then the price of traditional office space is going to crater... taking with it the price (or demand) of WeWork space, which is already not exactly operating at the best margins ever.
Post reply on HN