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The We Company S-1

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Re: The We Company S-1

#181

Post by fjp »

nknealk wrote: post #144
fjp wrote: post #96

Earlier quoted context omitted.

What exactly is deferred rent and what does it mean for We Company?

Let me try to explain with an example. GAAP requires straight line depreciation of a lease. So if I gave you a 2 year lease on a facility and required a single payment of $1M at the end of the term, you'd account for that as 500K expense in year one, 500K in year 2. In year 1, your cash balance didn't change though right? I only wanted payment in year 2. So you record a 500K deferred rent liability to indicate that t…

Very clear explanation, thank you.

It seems somewhat curious they don't have to reveal when they would be contractually obligated to pay out?

Re: The We Company S-1

#182

Post by nova22033 »

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...

FB opened at 38 and is now close to 200..so maybe not the best comparison. FB actually makes money.

Re: The We Company S-1

#183

Post by dctoedt »

notyourday wrote: post #155
dctoedt wrote: post #139

Earlier quoted context omitted.

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 f…

Yeah, except that's not how this works outside the theoretical realm. In practice, those that actually took companies public know that the more terrible crap you throw into the S-1 ( pitch deck included ) as long as you state that risk-wise you are probably a terrible investment for the public, the better protected you are from the lawsuits in the future when the public's investment does not pan out: you say 'we are…

This is also true. Back when I was drafting my then-company's Form 10-K annual reports, for just that reason I loaded up the risk section with a list of all the things that could go wrong, based on studying similar lists from the big software companies. It's sometimes known as vaccination or inoculation — "hey, we told you all these things that could make our stock price go south!"

(The danger with this approach, of course, is that if you inadvertently leave something out, the plaintiffs' lawyers will spotlight the omission and argue, "they LIED!")

Re: The We Company S-1

#184

Post by human20190310 »

jsty wrote: post #47
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.

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..."

> Adam is a unique leader who has proven he can simultaneously wear the hats of visionary, operator and innovator...

Is this a normal sort of thing to see in such a filing? He's being referred to by his first name and heaped with praise.

Re: The We Company S-1

#185

Post by goobynight »

jermaustin1 wrote: post #46
webninja wrote: post #12

> We have 3 classes of stock: Class A shares which have 1 vote, class B shares, which have 20 votes, and class C shares which have 20 votes. All classes vote alongside each other. I wouldn’t consider being an investor in this company unless class B or C shares are publicly traded. Just look at the underperformance of GOOGL, SNAP, and SQ for reasons why not to be an investor here.

Unfavorable opinion alert! Lets say they were publicly traded, and not held for institutions, VCs, and fonders. Would you as a person, buying Class B shares ever buy enough that the 20 votes per share matter? Why does the number of votes to you matter, unless you sank a few hundred million into the company (at which point, you would be an institution or vc), your votes wouldn't matter with any of the classes.

While the answer would be no for most, it helps to have VCs and institutions that have a buy-in price similar to yours, essentially advocating to protect everyone's investment.

Re: The We Company S-1

#186

Post by shawabawa3 »

Barrin92 wrote: post #42
arnvald wrote: post #30

Next Uber? Impressive growth, but their expenses grow at the same pace (they consistently need to spend ~$2 to earn $1). WeWork's locations are wonderful, but if they want to start making money, they need to start charging more or lower the costs. Won't people just move to cheaper offices then?

>WeWork's locations are wonderful really had the opposite experience. To me they feel like a neural net went rogue and scanned through a billion pictures of "generic millenial apartment" and then turned it into workplaces. Every weworks place I've seen seems completely exchangeable and lacking any sort of character.

> Every weworks place I've seen seems completely exchangeable

That's kind of the point. You get a consistent office environment in any wework

It might not be perfect, but in my experience it's way better than the average office (at least in London)

Re: The We Company S-1

#187

Post by BeetleB »

maroonshifter wrote: post #161
JumpCrisscross wrote: post #78

Earlier quoted context omitted.

> they’re blown out by marketing photos, full-page charts, and branding Companies get a lot of latitude with the first few pages. Seasoned S-1 skimmers peruse that stuff, but save the digging in for the risk factors, financials and the accompanying notes.

Nit, peruse means to read carefully with an attention to detail.

Pick to your nit:

https://www.merriam-webster.com/words-at-play/peruse-usage

The casual reading meaning, although not the original one, has been in use since the 1500's.

Re: The We Company S-1

#188

Post by tuyguntn »

Traster wrote: post #134
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.

This is dangerous in case of WeWork, since founder is leasing property to WeWork. Founder knows how much profit is company generating, he can increase rent prices and make WeWork zero profitable all the time, but his other company earns all profit, because he has >50% voting power, he might decide to stay with his own company even if he increases rent

Re: The We Company S-1

#189

Post by tw1010 »

ohashi wrote: post #104
nickdandakis wrote: post #90

Earlier quoted context omitted.

I'd agree except WeWork's emphasis on design is a huge reason they have become this big in the first place.

It's a public offering, WeWork didn't invent design. That's a terrible argument.

Yeah, I see this as a pretty interesting illustration at how poor engineers are at figuring out how things actually function in the world for anything other than products.

Re: The We Company S-1

#190

Post by not2b »

xiphias2 wrote: post #67
heavenlyblue wrote: post #4

Earlier quoted context omitted.

"We have free lunch, a ping-pong table and a VR room with monthly fitness days"

Actually they don't have free lunch, which is quite strange for Silicon Valley companies

Old Silicon Valley (companies primarily engaged in the design and production of silicon) doesn't do free lunch.
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