Earlier quoted context omitted.
Please come back and post your position on IPO day so we can all have a good laugh.
In their defense, FB IPO was an epic fail that eventually turned out to be a good price
[deleted]
WeWork to List Shares on Nasdaq, Make Governance Changes
31–40 of 51 posts
Re: WeWork to List Shares on Nasdaq, Make Governance Changes
#32Earlier quoted context omitted.
From what I've read, the WeWork locations in their mature markets are profitable, but they've been investing heavily in new/immature markets. Despite We's bizarre straddle between being a real estate company and trying to be a tech company, it's a fairly standard growth play: burn money now in order to gain more market share over time. If they wanted to, they could slow down on new purchases/rentals/construction and…
Their income stream is month-to-month and can disappear quickly in an economic slowdown. Their lease liabilities have a timescale of years.
As an ex-employee I am indifferent to WW’s success or failure, but to set a few things straight, very few of their members are on month to month deals. The larger deals they do for corporates are often multi-year commitments.
As long as a sophisticated large corporate sees a net benefit of being in a wework they will stay.
As an analogy, everyone knows running servers on AWS is more expensive per unit of compute than running your own hardware, however, there is a genuine value for a company to hand off the running of an office space (and the capital investment on buildout) to a third party in exchange for predictable monthly opex.
Re: WeWork to List Shares on Nasdaq, Make Governance Changes
#33From a point of view of a regular human, how is WeWork good for me? I'm generally opposed to 1 company to "rule them all", and I would like to see giants to be broken down. In case of say, Amazon, at the very least being so huge may allow (arguably) for cheaper prices and almost everything in one place, delivered conveniently. suppose that's true. How one company owning a lot of real estate is good for me? The way I…
> They aren't doing anything other than using huge sums of money to generate more money. Isn't that the function of _any_ company in capitalism? (Excluding, possibly, non-profits)
No. This is rent seeking.
Re: WeWork to List Shares on Nasdaq, Make Governance Changes
#34From a point of view of a regular human, how is WeWork good for me? I'm generally opposed to 1 company to "rule them all", and I would like to see giants to be broken down. In case of say, Amazon, at the very least being so huge may allow (arguably) for cheaper prices and almost everything in one place, delivered conveniently. suppose that's true. How one company owning a lot of real estate is good for me? The way I…
> They aren't doing anything other than using huge sums of money to generate more money. Isn't that the function of _any_ company in capitalism? (Excluding, possibly, non-profits)
Not necessarily.
Car manufacturers for example. The byproduct of them making money is the fact that cars becoming safer, more efficient, etc. Ultimately, it makes my life better.
I mean. I understand what WeWork is doing, they trying to make money and it's not against the law. All I'm saying is they aren't doing anything good for a regular person, and possibly even will hurt in the long run.
I think that's why ppl hate on them. At least I think that's why I don't root for them to succeed. I just don't see why
Re: WeWork to List Shares on Nasdaq, Make Governance Changes
#35Converting a capital intensive and inflexible office lease commitment to monthly payments and the ability to scale is very useful to many companies that manage their real estate prudently.
WW could be successful without all the rah-rah about changing the world. Like Uber, I’m sure they could afford to shed a few thousand employees (who were hired for growth) and continue to run a more sustainable business.
Re: WeWork to List Shares on Nasdaq, Make Governance Changes
#36From a point of view of a regular human, how is WeWork good for me? I'm generally opposed to 1 company to "rule them all", and I would like to see giants to be broken down. In case of say, Amazon, at the very least being so huge may allow (arguably) for cheaper prices and almost everything in one place, delivered conveniently. suppose that's true. How one company owning a lot of real estate is good for me? The way I…
Just as AWS made it easy to spin up a server, WeWork is making it easy to spin up a desk. This matters for companies with teams scattered around the world. If there's a WeWork in a certain city, it's super easy for us to get our team onboarded there - the brand is consistent, we know our people are going to be comfortable and happy.
Say what you will about their ridiculous financials, the product itself is good.
Re: WeWork to List Shares on Nasdaq, Make Governance Changes
#37I don't understand the hype around WeWork.
Nothing it does is innovative or different.
Its strategy and product can be easily replicated by anyone with enough cash to burn.
It seems less like a business and more like a rent-seeking scam to loot money from investors until they've sold to the greatest fool they can find.
Re: WeWork to List Shares on Nasdaq, Make Governance Changes
#38Converting a capital intensive and inflexible office lease commitment to monthly payments and the ability to scale is very useful to many companies that manage their real estate prudently. WW could be successful without all the rah-rah about changing the world. Like Uber, I’m sure they could afford to shed a few thousand employees (who were hired for growth) and continue to run a more sustainable business.
Sustainable as in much more low key and not trying to grow a lot? How would that sit with investors? No less Softbank’s $9B investment into it and 30% ownership.
Re: WeWork to List Shares on Nasdaq, Make Governance Changes
#39I can guess (however unlikely it may be) how Uber might some day make money through its monopoly power or use of autonomous cars and justify its valuation. I just can't imagine how WeWork could continue growing and turn a profit if it can't do it in this booming economy. The freelancers and small businesses that use it are likely the first to end their memberships and work from home or coffee shops.
From what I've read, the WeWork locations in their mature markets are profitable, but they've been investing heavily in new/immature markets. Despite We's bizarre straddle between being a real estate company and trying to be a tech company, it's a fairly standard growth play: burn money now in order to gain more market share over time. If they wanted to, they could slow down on new purchases/rentals/construction and…
Not disputing, but could you please provide a link or two that argues they are profitable in existing markets?
I’ve only looked at their S-1, and there wasn’t hard information (e.g. single building operating statements) for me to conclude this.
Re: WeWork to List Shares on Nasdaq, Make Governance Changes
#40I can guess (however unlikely it may be) how Uber might some day make money through its monopoly power or use of autonomous cars and justify its valuation. I just can't imagine how WeWork could continue growing and turn a profit if it can't do it in this booming economy. The freelancers and small businesses that use it are likely the first to end their memberships and work from home or coffee shops.
The freelancers and small businesses that use it are likely the first to end their memberships and work from home or coffee shops.
Coffee shops are great places to get work done for a few hours. But stay in one for a whole day and you start to get weird looks unless you are buying coffee continuously. And once you buy enough $5 coffees to justify sitting there for a day, you might as well be in a WeWork.
Working from home simply isn't an option for many people. If you live in a downtown area, you likely don't have the space for a proper setup. Even if you do, many people don't like working alone. Also, if you want multiple employees working together in person, an office starts to make a lot more sense.
So I actually think the freelancers and small businesses who remain in business are the last ones to leave. If you chose to be in WeWork in the first place, you probably like it, and the cost of office space there is negligible compared to payroll. The first ones to leave are the corporate customers who cut head counts. Small companies tend to have less waste, so it's hard to cut people in a downturn. Big corporations, where the people making the firing decisions don't actually know the people being fired personally, have easier time laying people off during recessions.