Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

WeWork Warns of Possible Bankruptcy

cnbc.com

Post reply on HN
Print view View original

71–80 of 150 posts

Re: WeWork Warns of Possible Bankruptcy

#71

Post by [deleted] »

JacobAldridge wrote: post #67
bhouston wrote: post #62

Earlier quoted context omitted.

I was referring to the fiasco of 2019 where WeWork went from $50B to $5B while giving Adam Neumann a $1B payoff - did you miss that, it was on here all the time? https://www.businessinsider.com/wework-ipo-fiasco-adam-neuma... The SPAC merger (not IPO) in October 2021 at $9B but then it has continued to slide now down to $250M. That IPO does seem to be trying to get some value out of this turkey by passing it off to p…

Don't get me wrong - I never saw the value! Just answering the question. Why in 2021 did they give him that payout? Likely because they thought it offered the best ROI moving forward (and for some shareholders, especially anyone who sold at the post-listing peak, it did). It definitely wasn't recognition for past success.

[deleted]

Re: WeWork Warns of Possible Bankruptcy

#72

Post by itsoktocry »

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…

>That guy got incredibly rich creating a company that was clearly not viable and seems likely to bankrupt.

WeWork is an extreme case, but this kind of thing happens with tech companies all the time.

Why do you think people in Silicon Valley equate an "exit" with success? Because at that point the insiders are paid out. What else matters?

Look at companies like Uber, Coinbase or Snap. Even Tesla. Insiders have accumulated billions in compensation that dwarves the value generated by the companies themselves (as measured by earnings).

Re: WeWork Warns of Possible Bankruptcy

#73

Post by HWR_14 »

danvoell wrote: post #20

Would also be interested to know what % of Spacs have shown success.

For who/what do you mean?

You mean SPACs that actually acquired a company? SPACs where the initial SPAC investors (pre-acquisition) made money? Those that have a solid company behind them, regardless of if investors made/lost money on the price movement since it announced? People who bought SPAC shares post-acquisition where the price went up?

(For pre/post acquisition investors, I assume you mean retail investors).

Re: WeWork Warns of Possible Bankruptcy

#74

Post by boeingUH60 »

I secretly root for Adam Neumann or any other entrepreneur that hustled their way into hundreds of millions and left VCs holding the bag in the free money era circa 2020...VCs were the ones doing the pump and dump for too long, and someone needed to give them a taste of their medicine.

I'll never admire Neumann because he squandered over $18bn(!), but there's a bit of poetic justice in how he took SoftBank for a ride..

Re: WeWork Warns of Possible Bankruptcy

#75

Post by drumhead »

It's not like temp office space companies didn't exist no one knew the risks. They'd been around for years and the pitfalls were well known. But this is what happens when you have lots of cheap money, low returns and massive fomo. Will they learn from this? Of course not, the AI bubble is currently being pumped up and I'm sure there's going to be a few more wonder industries to lose a fortune in just round the corner.

Re: WeWork Warns of Possible Bankruptcy

#76

Post by codingdave »

mynameishere wrote: post #52
fredgrott wrote: post #33

Earlier quoted context omitted.

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].

While "boomers" is sometimes used mockingly, it also describes an actual generation of people who do have a significant impact on society, and do have enough common ground to make discussion of that generation useful in sociological dialogue. So no, I do not stop reading at the word "boomer" any more than I stop reading at the word "millennial".

Re: WeWork Warns of Possible Bankruptcy

#77

Post by itsoktocry »

JacobAldridge wrote: post #51
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 qui…

>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.

This makes no sense to me.

Why would you pay hundreds of millions of dollars to someone for a paper valuation and market cap? It was all meaningless.

Re: WeWork Warns of Possible Bankruptcy

#78

Post by i_am_jl »

bhouston wrote: post #66
lotsofpulp wrote: post #57

Earlier quoted context omitted.

> . 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.

SoftBank in particular seems to fund a lot of fraudsters. I wonder why? Just the number of total investments SoftBank makes or is there less DD? Just yesterday I saw this news: https://techcrunch.com/2023/08/04/softbank-sues-irl-over-ela...

DD? Softbank just throws gobs of money at companies with founders Masayoshi Son likes.

Softbank's "investment strategy" would've ended the company decades ago if it didn't buy a quarter of Alibaba for $20m, a share that would end up being worth over $100b a few years ago.

Re: WeWork Warns of Possible Bankruptcy

#79

Post by boeingUH60 »

bhouston wrote: post #66
lotsofpulp wrote: post #57

Earlier quoted context omitted.

> . 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.

SoftBank in particular seems to fund a lot of fraudsters. I wonder why? Just the number of total investments SoftBank makes or is there less DD? Just yesterday I saw this news: https://techcrunch.com/2023/08/04/softbank-sues-irl-over-ela...

Masayoshi Son is a gambler that invests more on gut instincts than fundamentals...most of his investments seem to fail, but a few have kept SoftBank going for so long, e.g, Alibaba, Sprint, etc.

Re: WeWork Warns of Possible Bankruptcy

#80

Post by weard_beard »

cgeier wrote: post #64

I'm somewhat surprised by this. I'm currently working out of a WeWork and not only was it hard to get an office there, but they are constantly expanding the location I'm in and just opened the fourth location in a 1.5km radius. Cost is also rather high for a very small office (supposed to be for 4 persons, but if with 3 people it feels very crowded). The business of renting office space en masse and renting it out in…

Let's say I start a lemonade stand. I sell lemonade for a pretty big markup... say €3 a cup. I add lots of ice to it as well, this is not a good deal for lemonade for the customer... but people seem REALLY thirsty and I am getting a good flow of customers. A local businessman approaches me and says he will lend me money to expand operations. He offers me €5 million. I take his money and I use €1 million to expand operations, I use €3 million to invest in the rights to every street corner in town, and I pocket €1 million. Then the value of the contracts for every street corner in town plummets. Suddenly these street corner contracts are worth €700,000 and I paid €3 million.

Now my business is worth €1.7 million. €3.3 million disappeared and I owe that businessman + interest.

If I sell lemonade for €3 a cup, but I'm only getting 50 customers a day with my expanded operations it will take me 60 YEARS just to pay down the principle.

Even if my product is expensive. Even if it seems like, for a lemonade stand, I'm doing well. Debt, the value of my assets, and mismanagement or corruption can vastly outweigh these factors.

Post reply on HN