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

The We Company S-1

sec.gov

Post reply on HN
Print view View original

131–140 of 346 posts

Re: The We Company S-1

#131

Post by elliekelly »

ohashi wrote: post #106
CrazyStat wrote: post #91

Earlier quoted context omitted.

It's a mix. Some locations they own, some they lease--including some that the CEO owns and they lease from him, which is an interesting arrangement.

How is that going to fly with a public company?

Page 28 discusses it. They have an interesting approach to managing the conflict:

> Pursuant to our related party transactions policy, all additional material related party transactions that we enter into require either (i) the unanimous consent of our audit committee or (ii) the approval of a majority of the members of our board of directors.

I was pretty impressed when I read "unanimous consent of our audit committee" but then it all went out the window when I saw or the majority of the Board. The company CEO/landlord is the person with the major conflict of interest. He also has the majority voting power of the company stock and will control the board. WeWork's attempt to mitigate this conflict of interest is nothing but smoke and mirrors.

Re: The We Company S-1

#132

Post by nabnob »

doppp wrote: post #33
mmillin wrote: post #2

My favorite part of new tech company filings is looking at the risk section and finding something to the effect of: "We are not profitable, and may never be." > We have a history of losses and, especially if we continue to grow at an accelerated rate, we may be unable to achieve profitability at a company level (as determined in accordance with GAAP) for the foreseeable future. I understand the reasoning behind havin…

It's not a tech company, it's a property company with the valuation of a tech company.

It's a property company that's planning tracking everything people do in their buildings.

>WeWork's latest acquisition is a small software company with 24 employees. Euclid is a spatial analytics platform...Euclid's website says the company is "focused on redefining the workplace experience of the future." Translation: optimizing every aspect of the physical workplace so workers are their most productive. Euclid does this by tracking how people move around physical spaces. Its technology can track how many people showed up to a meeting or to that after-work happy hour. The company can see where employees tend to congregate and for how long. It's all done over Wi-Fi.

Edit - forgot to link the article - https://www.inc.com/betsy-mikel/wework-is-trying-a-creepy-ne...

Re: The We Company S-1

#133

Post by sct202 »

buboard wrote: post #111
sidyapa wrote: post #17

The financials - https://imgur.com/a/NZONeDo TLDR : Revenue - $1.535B | Costs - $2.904B | Loss - $1.369B

Whats the expectation here? That real estate will get 50% cheaper or that users will pay 100% more to rent an office?

There's a contribution margin graph on page 72, that kind of tries to explain away their high costs as costs related to their expansion and that their existing locations have a sizable margin that is hidden by all their expansion costs. I don't really buy it, but that sounds like the story they're trying to sell.

Re: The We Company S-1

#134

Post by Traster »

rbrtl wrote: post #103

> Upon completion of this offering, Adam Neumann will own or control more than 50% of the total voting power of our capital stock Another Zuckerberg style IPO. Activist investors beware...

It's actually a good thing, they can't be included in a lot of indexes because of that clause which means only people truly intent on setting fire to their cash will ever buy the stock.

Re: The We Company S-1

#135

Post by goatinaboat »

buboard wrote: post #105
CaptainZapp wrote: post #69

Earlier quoted context omitted.

Sheesh! I think I found a company, label it tech and mention in the prospectus my potential customership of 8 billion people. Do investors actually buy into such bullshit?

Investors seeking to move their money out of unstable countries won’t mind

Saudi sovereign wealth fund —> SoftBank Vision Fund —> WeWork

I do wonder why Silicon Valley workers tolerate this given the regime’s track record on... well... everything. Up in arms over Maven or Dragonfly but no one seems to care that this is part of the regime’s plan to sustain itself when the oil runs out.

Re: The We Company S-1

#137

Post by hobofan »

mrcu5 wrote: post #123
bko wrote: post #98

Earlier quoted context omitted.

They're trying to sell it as tech > We have approximately 1,000 engineers, product designers and machine learning scientists that are dedicated to building, integrating and automating the complex systems we use to operate our business

To do what? I'm not too familiar with them but what more do they have other than a website to look at potential spaces with some photos and a description and sign up for one? Maybe process payments as well?

Helpdesk software and room booking. But yeah _1000_ people in product development sounds absurd for "We".

Re: The We Company S-1

#138

Post by pge »

dynjo wrote: post #44
i_am_nomad wrote: post #28

Does the S-1 disclose the fact that the founder is also one of the company’s biggest business partners? He buys up properties and then leases them to WeWork. Seems like a red flag to me.

Then cashes out another $700m of investors cash pre-IPO probably to buy more properties, to lease back again...genius. But yeah, red flag a mile wide.

I agree with your larger point that his dealings are a huge red flag, but just to clarify, a bunch of that money was borrowing against his existing stock rather than actually selling to investors, which is quite different. Selling can imply a lack of confidence in future value, while borrowing against the stock implies some level of confidence.

Re: The We Company S-1

#139

Post by dctoedt »

beager wrote: post #50

I’m really disgusted by how much recent tech IPOs inject pitch deck-style garbage into the S-1 filing, especially this one. I’ve always had a great amount of respect for the mediating nature of the S-1’s dry, candid, and ruthlessly honest assessment of business risks, and even though those things are still there, they’re blown out by marketing photos, full-page charts, and branding. This is basically like putting per…

WeWork's litigation counsel might have wanted the pitch-deck stuff to go into the S-1 to make the information more understandable to non-business people. That way, the pitch deck would be an official part of the record; in turn, this would mean a couple of things:

1. If disgruntled investors were to sue WeWork, the pitch-deck material could be referred to by WeWork's counsel in tactical maneuvering such as a motion for judgment on the pleadings, without having to jump through all the hoops that might otherwise be required;

2. Worst case, if a lawsuit ended up going all the way to a jury trial, the pitch-deck material presumably would be sent back into the jury room as a "real" exhibit, allowing the jury to review the pitch-deck material during deliberations. (The jurors might even be given individual notebooks with copies.) In contrast, if the pitch deck were left out of the S-1, the judge might or might not allow it to go back into the jury room, especially if it were a so-called demonstrative exhibit prepared for the litigation.

(I teach my contract-drafting students to draft agreements with an eye toward being readable by judges and jurors, with tables, footnotes, non-legalese language etc. — and if the contract language is understandable to a juror, then the parties' business people will be able to get to signature more quickly and are less likely to get into disputes afterwards.)

Re: The We Company S-1

#140

Post by tgtweak »

utopian3 wrote: post #57
jsty wrote: post #47

Earlier quoted context omitted.

Yes, under "related party transactions": https://www.sec.gov/Archives/edgar/data/1533523/000119312519... "We are party to lease agreements for four commercial properties with landlord entities in which Adam has an ownership interest..."

Isn’t “related party transactions” where Enron’s CFO hid most of their funny accounting to companies he controlled and profited from?

Seems like a good place to put it then. S1 readers know to look here.
Post reply on HN