WeWork has frittered away $46.7B in value as the stock sinks below ¢50

Post by ghaff » Sat, May 20, 2023, 12:55 PM UTC

juujian wrote: post #25

jfengel wrote: post #3

Was anything of value lost? The idea, as I understand it, was co-working spaces. They were there to optimize that, extracting the maximum profit in the way they leased stuff. Ok, fine. Is co-working still going on? Has something desirable been lost? Were they creating any value that couldn't be recreated by someone else. I can't care one way or another about fake valuation of market cap. But I do care if work is gett…

One could speculate whether things would have turned out differently if Covid and the raise of the home office had not happened? If Covid emptied out WeWork's spaces like it cleared out corporate HQs, companies probably just dropped all those contracts and stopped paying WeWork?

Post by Mistletoe » Sat, May 20, 2023, 12:57 PM UTC

polygamous_bat wrote: post #23

jarym wrote: post #5

Yes its a huge value loss but isn't this part of the VC model - invest in some companies knowing most will probably whither away in one way or another but a few will hit it out the park? The article mentions Benchmark and Insight have done ok in their other investments. Softbank though is a bit of an outlier - maybe it was a one-hit-wonder with Alibaba. They don't appear to have invested like other VCs at any rate.

One new theory is that the new VC model, as postulated in Venture Predation [0] is to create the illusion of potential to success so that you can dump your shares on the market at a sky high price. After that, VCs don't care if the company loses $50B in value, they already had their exit. [0] https://news.ycombinator.com/item?id=36003096

Post by cturner » Sat, May 20, 2023, 12:57 PM UTC

jfengel wrote: post #3

Was anything of value lost? The idea, as I understand it, was co-working spaces. They were there to optimize that, extracting the maximum profit in the way they leased stuff. Ok, fine. Is co-working still going on? Has something desirable been lost? Were they creating any value that couldn't be recreated by someone else. I can't care one way or another about fake valuation of market cap. But I do care if work is gett…

Post by IshKebab » Sat, May 20, 2023, 12:58 PM UTC

AndrewDucker wrote: post #30

heywhatupboys wrote: post #9

Earlier quoted context omitted.

"Taxi services" was never going to be a silicon valley style success, because it just can't scale that way. "Food delivery services" was never going to be a silicon valley style success, because it just can't scale that way.

Uber has made losses every year, and only works because it is supported by VC money: https://fourweekmba.com/uber-losses-by-year/ Deliveroo, likewise: https://www.businessofapps.com/data/deliveroo-statistics/ These are not successful companies, except insofar as they are very successful at handing out investor money.

Post by reaperducer » Sat, May 20, 2023, 1:01 PM UTC

polygamous_bat wrote: post #23

jarym wrote: post #5

Yes its a huge value loss but isn't this part of the VC model - invest in some companies knowing most will probably whither away in one way or another but a few will hit it out the park? The article mentions Benchmark and Insight have done ok in their other investments. Softbank though is a bit of an outlier - maybe it was a one-hit-wonder with Alibaba. They don't appear to have invested like other VCs at any rate.

One new theory is that the new VC model, as postulated in Venture Predation [0] is to create the illusion of potential to success so that you can dump your shares on the market at a sky high price. After that, VCs don't care if the company loses $50B in value, they already had their exit. [0] https://news.ycombinator.com/item?id=36003096