The We Company S-1 • Hacker News Board

Re: The We Company S-1

#341

Post by speedracer » Thu, Aug 15, 2019, 5:28 AM UTC

jly wrote: post #330

gdgtfiend wrote: post #205

WeWork has $33.9 Billion in Non-canceable lease commitments, and it's lease payments are increasing 100% YoY. I think that is the true ticking time bomb for this company. In a world where billion dollar losses (Uber) seems somewhat normal, those lease obligations are still outrageous, and those payments will come due eventually, whether they have the money or not. In 2019 they attributed over $800 Million to operatin…

Even worse, WeWork doesn't generate that much more revenue from tenants than it spends servicing its enormous lease obligations. They admit in the risks section that a significant portion of their members are small and medium sized businesses/freelancers who may be negatively affected by economic downturn. Their average lease duration is 15(!) years, and most do not have early termination provisions. Oof.

They don't have early termination provisions!?? That better have come at a steep discount for WeWork to take such a risk.

Re: The We Company S-1

#342

Post by untangle » Thu, Aug 15, 2019, 8:16 AM UTC

smacktoward wrote: post #263

burtonator wrote: post #219

Earlier quoted context omitted.

Adam is extraordinarily humble. Everyone, including Adam, would never exaggerate. Adam is a part of everything. He is in the sky and sea. He is in the dreams of children at night. He is all that there is, forever.

Adam is the Alpha and the Omega, the Beginning and the End. Those who invest will inherit all this, and Adam will be their God and they will be his children. But the cowardly, the unbelieving, the shorts -- they will be consigned to the fiery lake of burning sulphur. This is the second death.

Adam's rise signals the start of the Apocalypse. Even his name is an affront, and a sardonic reference to the Alpha (Book of Genesis) and Omega (We).

Re: The We Company S-1

#343

Post by santiagogo » Thu, Aug 22, 2019, 4:22 AM UTC

danieltillett wrote: post #333

santiagogo wrote: post #300

Earlier quoted context omitted.

I know one landlord who rented several buildings to them and he understands the risks perfectly, but says the price per sq/ft he's getting paid is so good that even if they blow up within 3 years it's still a great deal.

Curious to know what the landlords think of Wework’s prospects. Does he think they are going to blow up soon?

Honestly I don’t think he cares/understands that much, but he’s pretty excited about the coworking trend in general and thinks it’s not going away.

Re: The We Company S-1

#344

Post by webninja » Fri, Aug 23, 2019, 1:11 PM UTC

nindalf wrote: post #23

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.

> underperformance of GOOGL This stock went from $54 in Aug 2004 to $1196 today. Just for me to understand, is that "underperformance"? Is your claim that other stocks that have a traditional voting structure have outperformed GOOGL over the same time period or that GOOGL itself could have achieved much higher highs, say 30x instead of a mere 22x? Either way, those are tall claims and it's on you to prove it.

There was a time when GOOGL was $900 and AMZN was $900. Look at where their share prices are now. $1182 and $1791. One of them underperformed the other.

Re: The We Company S-1

#345

Post by webninja » Fri, Aug 23, 2019, 7:23 PM UTC

webninja wrote: post #344

nindalf wrote: post #23

Earlier quoted context omitted.

> underperformance of GOOGL This stock went from $54 in Aug 2004 to $1196 today. Just for me to understand, is that "underperformance"? Is your claim that other stocks that have a traditional voting structure have outperformed GOOGL over the same time period or that GOOGL itself could have achieved much higher highs, say 30x instead of a mere 22x? Either way, those are tall claims and it's on you to prove it.

There was a time when GOOGL was $900 and AMZN was $900. Look at where their share prices are now. $1182 and $1791. One of them underperformed the other.

To elaborate further the justification for this discrepancy for anyone who likes reading:

Stocks are ultimately worth a function of 4 things:

1) The value of their future dividends,

2) The value of their future stock buybacks,

3) The value of remaining book assets at company liquidation/bankruptcy,

or 4) the value per share everyone will receive if the company is bought out.

People can invest for non-monetary reasons: for example wanting to invest in Tesla because they just want electric cars to be a thing or investing in Google because they just love certain aspects of the company. However, at late-stage investing, investments are based on fiduciary incentives from these 4 returns of capital. Absent those 4 methods of returning capital, stock investing is a pyramid scheme.

Amazon shareholders can eventually collude together to vote for more returns of capital if they ever stop believing in Jeff Bezos’s above average performance in returning increasingly higher amounts of free cash flow. This is about as likely as it is for Buffet’s BRK.A/BRK.B (highly unlikely due to his high profile but not impossible if everything were to go south).

A buyout of Alphabet is unlikely at this point because only 3 companies have a higher market cap now. Tech companies don’t have much book value to liquidate. They can potentially choose to not to ever give a dividend and they can keep doing share buybacks in joke quantities —- and pension funds can’t potentially vote to change that.

This is my theory for these stock performance discrepancies and I’d be happy to hear others thoughts on this.

Re: The We Company S-1

#346

Post by webninja » Fri, Aug 23, 2019, 8:05 PM UTC

pmart123 wrote: post #38

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.

GOOGL has voting rights versus GOOG. There hasn't been a large performance difference though. IAC vs. MTCH, FB, Nike, Berkshire, and Regeneron all have done well though long-term with dual share classes as contra examples. Founder led companies typically out-perform the market. In WeWork's case though, we've seen huge governance red flags already though, so I am not saying voting rights don't matter. If the managemen…

Sergey Brin and Larry Page together own 14% of Alphabet’s shares but own 56% of Alphabet’s voting rights because the shares they own are mostly non-public preferred shares. Since they own more than 51% of the voting rights, GOOGL shares don’t carry a meaningful premium over GOOG. Today, the premium is only between $2 and $3.