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WeWork Warns of Possible Bankruptcy

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Re: WeWork Warns of Possible Bankruptcy

#51

Post by JacobAldridge »

bhouston wrote: post #37

I do not understand why Adam Neumann got that massive exit settlement from We Work? > WeWork founder Adam Neumann received $245m in company stock [....] In addition to the $245m grant, Neumann received $200m in cash, was able to refinance $432m in debt on favorable terms, and allowed a finance company controlled by the former chief executive to sell $578m in WeWork stock. [1] That guy got incredibly rich creating a c…

"Neumann’s ability to negotiate such rich terms was helped by the fact that his shareholdings controlled 10 times the votes of a normal shareholder, and he was able to argue for a higher price to cede control."

Correctly or, more likely, not - it seems the payoff was made in early 2021 at a time when valuations were soaring and there was a renewed push for an IPO. Neumann could have blocked that.

If I'm parsing a quick read of the data correctly, they backdoored an IPO in October 2021 at an $8bn valuation - and shares jumped 13% (so + $1Bn). A snapshot at that time could be used to argue they paid Neumann $x00 million to realise a multi-Billion dollar valuation and $1Bn+ growth in market cap.

Could they have forecast the rapid decline thereafter? Maybe some of those investors didn't care, as long as they got some return? If Neumann had dragged the battle out for another year, into 2022 when the markets went South, it probably would have cost WeWork a lot more on paper than whatever they paid him.

Re: WeWork Warns of Possible Bankruptcy

#52

Post by mynameishere »

fredgrott wrote: post #33
PedroBatista wrote: post #11

Should have happened in 2021 but our "brightest VC minds" thought it would be a good idea to burn even more "free" money on this pit. To be fair, WeWork is just another roll of the dice company from the Uber era of free money. Let's pump it up and become too-big-to-fail! It appears WeWork wasn't big enough.. And they can blame COVID all they want, but the business model was already showing sights of failure before 20…

We need to be more detailed about this as it highlights a demographics problem underlying it.... 1. Free Money was the tail end of boomers investments pools 2. There will be a 12-year gap until the next investments pools increase from the new workers entering the working market. 3. Next investments pool increase from the new worker cohorts group will be smaller than the boomers. All this indicates that the strategy o…

Am I the only one who just stops reading any comment if it contains the word "boomers"? It's entered a tidy lexicon with "lol" and "This." and [any smiley].

Re: WeWork Warns of Possible Bankruptcy

#55

Post by Aeolun »

ramraj07 wrote: post #6
throwoutway wrote: post #3

The story of WeWork is fascinating and sad to watch (for the employees). Adam got his but his employees didn't. The financial numbers are pretty sad too. - Market cap below $500 million. - Lost $700 million in 6 months this year - Lost $2.3 billion in 2022 - Roughly 3 billion in debt - Total liquidity of only $680 million (only 1/3 is cash).

Don’t forget that the VCs backed him again on a somehow even shadier, blatantly dystopian startup idea with a metric ton of money again [1]. 1. https://fortune.com/2023/07/11/adam-neumann-new-company-flow...

What in the hells?! This is absurd. How does someone that steers their company into the gutter get financed to the tune of $350M again?

Re: WeWork Warns of Possible Bankruptcy

#56

Post by ulfw »

sersi wrote: post #49

I got 3 month for free with WeWork just before covid (hotdesking only). I went there 2-3 times and found it to be a significantly worse working environment than even a starbucks. The chairs were extremely uncomfortable, the acoustics of the room made it noisy. Really didn't see the point and can't imagine how they can get people to use them. It might be different in other locations but at least the two locations I've…

Same. Got a subscription from work. Never really used it. The few times I tried them in HK they were horrible. Only the New Street building was nice enough but for some reason they were allegedly always 'full' (they clearly weren't) and wouldn't let me in. Enough nice cafes in the area that are more comfy and have friendlier personal.

Re: WeWork Warns of Possible Bankruptcy

#57

Post by lotsofpulp »

bhouston wrote: post #37

I do not understand why Adam Neumann got that massive exit settlement from We Work? > WeWork founder Adam Neumann received $245m in company stock [....] In addition to the $245m grant, Neumann received $200m in cash, was able to refinance $432m in debt on favorable terms, and allowed a finance company controlled by the former chief executive to sell $578m in WeWork stock. [1] That guy got incredibly rich creating a c…

> . Otherwise, the public fund managers should go after this complete lack of governance and oversight.

The public fund managers would be the ones guilty of not doing their due diligence.

Re: WeWork Warns of Possible Bankruptcy

#58

Post by kryptiskt »

sarreph wrote: post #27
mirekrusin wrote: post #18

Earlier quoted context omitted.

They probably enter into long term lease for the building they can’t get out overnight?

Good point - goes to show it’s always easier to criticise behemoths like this from the outside. However, I wager that they have had long enough to plan around this one - _surely_ there are a non-negligible amount of leases they can trade or sell on / do something with as most WeWork locations are in highly desirable spots.

If I ran WeWork my evil plan would be to move to a franchise model, collect a franchise fee from each lucky winner of the franchisee stakes and transfer the leases to them. And then I would sit back and collect a modest fee based on revenue (say 10%) for the branding and the concept.

Re: WeWork Warns of Possible Bankruptcy

#59

Post by dschuetz »

WJW wrote: post #50
dschuetz wrote: post #41

What does WeWork actually sell? I mean... what is their source of revenue, or is it just dumb me and it's my own fault that I don't know that?

Working space. You can rent a single desk or multiple, and they charge you money every month. Bog standard stuff, has been done a million times all over the world. The problem for WeWork is that they chose to grow incredibly fast, positioned themselves a a very high-end premium type of service, and funded it all with lots of debt and VC (mostly SoftBank) investments, despite nearly every financial professional warnin…

Ah, essentially they are selling office desks to start-ups who don't need them anymore post-covid. Sounds bulletproof to me /s.

I think that many fast-growing start-ups have decided that it's cheaper and safer to work from home, so maybe WeWork needs to start working and look for other sources of revenue. or do nothing and implode.

Re: WeWork Warns of Possible Bankruptcy

#60

Post by jt2190 »

fredgrott wrote: post #33
PedroBatista wrote: post #11

Should have happened in 2021 but our "brightest VC minds" thought it would be a good idea to burn even more "free" money on this pit. To be fair, WeWork is just another roll of the dice company from the Uber era of free money. Let's pump it up and become too-big-to-fail! It appears WeWork wasn't big enough.. And they can blame COVID all they want, but the business model was already showing sights of failure before 20…

We need to be more detailed about this as it highlights a demographics problem underlying it.... 1. Free Money was the tail end of boomers investments pools 2. There will be a 12-year gap until the next investments pools increase from the new workers entering the working market. 3. Next investments pool increase from the new worker cohorts group will be smaller than the boomers. All this indicates that the strategy o…

> There will be a 12-year gap until the next investments pools increase from the new workers entering the working market.

Why 12 years?

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