WeWork says will file to withdraw IPO • Hacker News Board

Re: WeWork says will file to withdraw IPO

#71

Post by john_moscow » Mon, Sep 30, 2019, 4:21 PM UTC

axiak wrote: post #39

S_A_P wrote: post #19

What I don't understand is how do things get this far down the road before a good old fashioned sanity check happens? I have got to think that Soft Bank knew/knows the valuation was off. The fact that they pushed on means they either intended to try and get away with it/take the money and run as I cant believe incompetence is the reason here. How did this get so far along??? As for Adam N, I have to think some part o…

I think the pure tech plays in 2019 are doing just fine. Zoom, Cloudflare, and Datadog all look like good companies. They're just not over-hyped and overinflated.

Cloudflare still relies on the "massive amount of free users creating buzz vs. a tiny fraction of paid users". Although not an obvious scam, they may very well go the Groupon way.

Re: WeWork says will file to withdraw IPO

#72

Post by wgerard » Mon, Sep 30, 2019, 4:22 PM UTC

I see lots of cheering which, to some degree, I understand given the public persona of Adam Neumann.

I'm more interested in the ramifications, and I don't just mean the obvious ones like "potential tech recession" (maybe, who knows) or "more due diligence" (unlikely, or if so likely to swing completely the other direction).

Given that "private markets are the new public markets" I wonder if this will just encourage more companies to stay private either indefinitely (e.g. MailChimp though obviously I realize they are an exception) or for a period far beyond the norm (AirBnB) to wait for a more favorable time to IPO. Maybe we'll see companies switch to RSUs instead of ISOs as this becomes more common.

Re: WeWork says will file to withdraw IPO

#73

Post by throwaheyy » Mon, Sep 30, 2019, 4:24 PM UTC

martinald wrote: post #21

Cannot understand how they can restructure this. Even one new building in London which isn't anywhere near structurally complete WeWork has taken 18 floors on a 25 year lease (I think due to open 2020 or 2021). Is there a way they can walk away from all these commitments? I understand they have a SPE structure which potentially allows them to do that, but I imagine there must be some costs or downsides to it, otherwi…

I’d guess, given the diversity of commercial RE counter parties that the WeWork hydra is negotiating with, at least a good portion would’ve priced-in a premium for early termination.

Re: WeWork says will file to withdraw IPO

#74

Post by mypalmike » Mon, Sep 30, 2019, 4:26 PM UTC

5trokerac3 wrote: post #51

S_A_P wrote: post #19

What I don't understand is how do things get this far down the road before a good old fashioned sanity check happens? I have got to think that Soft Bank knew/knows the valuation was off. The fact that they pushed on means they either intended to try and get away with it/take the money and run as I cant believe incompetence is the reason here. How did this get so far along??? As for Adam N, I have to think some part o…

We've been seeing nothing but bullshit valuations for years. Twitter was a bullshit valuation. I'm just glad we finally had a sanity check on something .

Twitter might be a bad example. The current P/E of Twitter is around 14 with the stock trading around 80% over the IPO price.

Re: WeWork says will file to withdraw IPO

#75

Post by LordFast » Mon, Sep 30, 2019, 4:28 PM UTC

JohnJamesRambo wrote: post #43

S_A_P wrote: post #19

What I don't understand is how do things get this far down the road before a good old fashioned sanity check happens? I have got to think that Soft Bank knew/knows the valuation was off. The fact that they pushed on means they either intended to try and get away with it/take the money and run as I cant believe incompetence is the reason here. How did this get so far along??? As for Adam N, I have to think some part o…

“There are three ways to make a living in this business: be first, be smarter, or cheat.“ -Margin Call SV ran out of the first two because they are much harder. We are left with the dying gasps of companies trying the third way.

This needs to be a lot higher.

Re: WeWork says will file to withdraw IPO

#76

Post by streetcat1 » Mon, Sep 30, 2019, 4:28 PM UTC

mharroun wrote: post #4

Incoming layoffs... between wework and uber the market will be "flooded" with talent. I wonder if having wework on your resume is a good or bad thing.

The market is always flooded with "talent". The problem is finding good engineers which are around 1 in 100 resumes.

Re: WeWork says will file to withdraw IPO

#77

Post by akulkarni » Mon, Sep 30, 2019, 4:28 PM UTC

john_moscow wrote: post #71

axiak wrote: post #39

Earlier quoted context omitted.

I think the pure tech plays in 2019 are doing just fine. Zoom, Cloudflare, and Datadog all look like good companies. They're just not over-hyped and overinflated.

Cloudflare still relies on the "massive amount of free users creating buzz vs. a tiny fraction of paid users". Although not an obvious scam, they may very well go the Groupon way.

This is a classic "bottoms-up" model that is quite viable (eg Dropbox, Slack, Zoom, Elastic, MongoDB). Not sure why anyone would call it a scam. In fact, I would be wary of software companies without a base of free users, as that means the company needs to keep spending a lot of its revenue on sales and marketing.

Re: WeWork says will file to withdraw IPO

#78

Post by notfromhere » Mon, Sep 30, 2019, 4:29 PM UTC

kossae wrote: post #59

tenaciousDaniel wrote: post #54

Earlier quoted context omitted.

I'm not knowledgeable in this area, but I think it's telling that SoftBank is the same people who gave a dog walking startup a 300M valuation: https://techcrunch.com/2018/01/30/on-demand-dog-walking-app-...

Note, the _investment_ was 300M, meaning the valuation was actually higher than that! According to Crunchbase: > Wag has a post-money valuation in the range of $500M to $1B as of Jan 30, 2018 according to PrivCo.

VC valuations are a solid argument against the wisdom of private markets

Re: WeWork says will file to withdraw IPO

#79

Post by mrnobody_67 » Mon, Sep 30, 2019, 4:29 PM UTC

S_A_P wrote: post #19

What I don't understand is how do things get this far down the road before a good old fashioned sanity check happens? I have got to think that Soft Bank knew/knows the valuation was off. The fact that they pushed on means they either intended to try and get away with it/take the money and run as I cant believe incompetence is the reason here. How did this get so far along??? As for Adam N, I have to think some part o…

Banks don't win IPO mandates by quoting the board of directors a valuation that's lower than the last round.

Both Goldman and Morgan Stanley gave the BoD much higher valuation numbers, which made members believe the stock price was going to go up... and when your options are going up in price, it's easiest not to rock the boat, and ignore misdeeds or conflicts.

You only realize who has been swimming in the ocean without trunks when the tide goes out ;)

Re: WeWork says will file to withdraw IPO

#80

Post by NotSammyHagar » Mon, Sep 30, 2019, 4:33 PM UTC

kache_ wrote: post #41

S_A_P wrote: post #19

What I don't understand is how do things get this far down the road before a good old fashioned sanity check happens? I have got to think that Soft Bank knew/knows the valuation was off. The fact that they pushed on means they either intended to try and get away with it/take the money and run as I cant believe incompetence is the reason here. How did this get so far along??? As for Adam N, I have to think some part o…

There are in fact a few unicorns with recurring revenue that is close to their operational costs. You just don't read about them on the news unlike the trainwrecks. Good news leads to no news.

What are those? Snowflake is one I think