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WeWork Needed a Bailout, But Adam Neumann Still Leaves a Billionaire

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Re: WeWork Needed a Bailout, But Adam Neumann Still Leaves a Billionaire

#71

Post by redshirtrob »

olliej wrote: post #23
tmh79 wrote: post #17

Earlier quoted context omitted.

there are also a lot of stories of early wework employees who were essentially told "we will give you options soon in the future, but sign your employment contracts now and trust that we'll get it done" and then didn't get it done. Really shady all around.

Oh yeah, I would always mandate that be a $ value in the contract. Edit: to clarify I mean “$x of shares”

I've always seen it worded as "The Company will grant you X shares subject to approval by the Board." I've never had the board not approve what was promised in the employment letter, but that wording sure makes it seem like it could happen.

Re: WeWork Needed a Bailout, But Adam Neumann Still Leaves a Billionaire

#72

Post by wpietri »

indemnity wrote: post #32
WisNorCan wrote: post #28

There is another less discussed downside to Vision Fund’s reckless spending and overvaluation of startups. While Travis & Adam make their billions, the employees at Uber and WeWork are granted overvalued options and stock that subsequently crashes. The Uber stock is still below where it was 5 years ago and may never recover. The WeWork stock will likely never recover. As an employee, I would avoid working for a compa…

Every time I see these shenanigans it validates my position of turning options into cash if I’m above water ASAP, and getting as much of my raises into base salary as possible. Twice burned (2001, 2009)...

Same. I have enough financial exposure to the tech industry through my work that I don't want my investments to be correlated with that.

Re: WeWork Needed a Bailout, But Adam Neumann Still Leaves a Billionaire

#73

Post by rapsey »

empath75 wrote: post #25

I have to ask when are the investors in softbank or the vision fund going to question this bail out? I’d be furious if it were my money being flushed down the toilet this way.

I read somewhere that softbank is a huge benefactor in japan central bank QE. So basically vision fund is for people with more money then they know what to do with and didn’t really earn it the hard way.

They could have spent it more wisely.

Re: WeWork Needed a Bailout, But Adam Neumann Still Leaves a Billionaire

#74

Post by wpietri »

somebodythere wrote: post #62
w-j-w wrote: post #11

Earlier quoted context omitted.

You honestly can't think of anyone else who is responsible? How is WeWork not fraud? How was it legal for Neumann to take all of that money?

What is fraudulent about WeWork?

This is a problem with the modern age. If someone is too clueless, arrogant, or deluded for us to prove they had criminal intent, is it really a crime?

In my ideal world, yes. But under the US justice system, perhaps not. Both political and business leaders have gotten away with amazing amounts of what I'd say is at best criminal negligence because they say, "I didn't know" or "I thought it was fine" or "I believe in my vision".

Re: WeWork Needed a Bailout, But Adam Neumann Still Leaves a Billionaire

#75

Post by SkyMarshal »

empath75 wrote: post #25

I have to ask when are the investors in softbank or the vision fund going to question this bail out? I’d be furious if it were my money being flushed down the toilet this way.

I think they already are. There are rumors Softbank may have trouble raising subsequent vision funds.

Re: WeWork Needed a Bailout, But Adam Neumann Still Leaves a Billionaire

#76

Post by dickeytk »

georgeecollins wrote: post #68
rdlecler1 wrote: post #48

Earlier quoted context omitted.

VCs are supposed to diligence that. They fail they loose.

“It takes two bad drivers to make an accident.“ F Scott Fitzgerald

First of all, I get your point.

Still, this is an awful analogy. What about 1-car collisions? And what if I hit a parked car?

Re: WeWork Needed a Bailout, But Adam Neumann Still Leaves a Billionaire

#77

Post by dickeytk »

mrep wrote: post #52
Aloha wrote: post #12

Earlier quoted context omitted.

I've been saying for years that stock grants/options/RSUs are like playing the lotto, and salary/benefits are more important. They're also a tool to keep people in roles they no longer want, because of a promise of a great payoff someday.

How are RSUs like playing the lotto if you work for one of the big 5 (GAFAM)? I work for one and my RSUs vest monthly and they are autosold so i get a USD based direct deposit each month. While it does very slightly, I wouldn't consider it the lotto.

You were awarded them 1-4 years ago though. That's when the value mattered.

To add to that, it's not like when you join a low-performing company you can just leave because you think you can get better value somewhere else. The cost of switching as an employee is very high.

Obviously it's a bit less of a gamble than the lotto, but it's not like decisions that were made 30 days ago are being played now, it's much longer term than that.

Re: WeWork Needed a Bailout, But Adam Neumann Still Leaves a Billionaire

#78

Post by redshirtrob »

sokoloff wrote: post #33
olliej wrote: post #15

Earlier quoted context omitted.

Especially for companies that aren’t public yet so there’s no guarantee that you’ll be able to exercise ever, even if it does become profitable and worth real money.

What prevents you from exercising options in the success case? You might not be able to sell the shares you receive, but you should be able to exercise and hold them. You might do this to manage tax exposure (to get the clock started on long term capital gains treatment and to make further gains capital rather than earned income).

It's certainly possible. It's a complicated topic. There's a lot to consider and much of it relates to your personal risk appetite and financial position.

There can be very serious tax consequences if the spread between your strike price and the FMV is large enough. The IRS doesn't care that you can't sell shares to pay the taxes. They're still due that year.

That said, you can probably do the math to stay outside AMT by limiting the number of shares you exercise. It's so hard to know whether or not to do that. I imagine a lot of employees felt pretty good about their WeWork options at the beginning of this year. I imagine. I don't know anyone there.

Re: WeWork Needed a Bailout, But Adam Neumann Still Leaves a Billionaire

#79

Post by nihonde »

rapsey wrote: post #73
empath75 wrote: post #25

I have to ask when are the investors in softbank or the vision fund going to question this bail out? I’d be furious if it were my money being flushed down the toilet this way.

I read somewhere that softbank is a huge benefactor in japan central bank QE. So basically vision fund is for people with more money then they know what to do with and didn’t really earn it the hard way. They could have spent it more wisely.

There is a hell of a lot of money that doesn’t have a safe home. If you’re wealthy in 2019, it may cost you money just to stash it somewhere low risk. Now extend that to sovereign funds, etc., and you can start to see why these obvious shenanigans are tolerated. A zero percent “return” is a net gain over holding in savings or bonds in a lot of places.

Re: WeWork Needed a Bailout, But Adam Neumann Still Leaves a Billionaire

#80

Post by iamsb »

Given that softbank is a public company, surprised there is not more shareholder outcry over the strategy of visionfund. In a way it is public money which is bailing out WeWork. Not to mention some of the questionable investments in Indian market (OYO, PayTM, Snapdeal) that seems to follow hyper valuation growth without seeing hyper value of growth of any of these companies.
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