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WeWork Warns of Possible Bankruptcy

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Re: WeWork Warns of Possible Bankruptcy

#81

Post by itsoktocry »

leroman wrote: post #28

Several years ago while hustling as a single founder, I hoped to get a desk in a private office (anything but open-space), so I would have a place to come to to focus on work, socialize and feel at work.. So I went to see what WeWork have to offer. There I saw a nice floor with nice looking private offices, finally taken to what they thought might be relevant for me, they showed me a tiny space where half a diner tab…

>This is what you get when you get an MBA type business management constantly

I love how HN blames MBAs for everything.

This was greedy "tech people", nothing more nothing less. Maybe if a few of the characters in this saga had MBAs they would have been able to better judge the value of the business, as opposed to gut and vibes. After all, it was the MBAs who pulled the IPO, while the tech crew continued to push this garbage on the public.

Re: WeWork Warns of Possible Bankruptcy

#82

Post by dzader »

LatteLazy wrote: post #9
WJW wrote: post #2

> The spectacular collapse of a company once valued by SoftBank at $40 billion has been years in the making, but is still surprising given the number of large commercial buildings around the world that don the company’s name. Is it actually surprising? If you too many assets that you bought with variable interest rate debt, then going bankrupt in a higher-interest-rate environment is exactly what I would expect.

Did they actually buy buildings? I thought they just took long term leases from owners and sold short term to their customers? I once read an article saying that for all the tech bs, weworks was basically just a (at the well timed) commercial rent play: fix low rent and then charge rising rents as the market goes up. I might be wrong though? I remember thinking it was like a bank (exposed to time risk) but with prope…

[dead]

Re: WeWork Warns of Possible Bankruptcy

#83

Post by benjaminwootton »

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…

He built an enormous global business and brand, and the investors wanted to buy his shares and push him out in a transparent negotiated commercial transaction.

He deserved every penny of it as far as I can see.

What’s the alternative? That his stock and voting rights went to SoftBank for free?

Re: WeWork Warns of Possible Bankruptcy

#84

Post by thisgoesnowhere »

rchaud wrote: post #35

VC capitalism over the past decade resembles the free spending era of Communist central planners tasked with rapidly industrializing their economies. 1) Dump enormous amounts of zero-interest capital into {{ sector }} 2) Entrust leadership to charismatic politicians rather than domain experts (Adam Neumann) 3) Craft a PR narrative emphasizing innovation and diminishing critics (Softbank "Vision Fund", "swinging for t…

The similarities are startling, it's all a consequence of reducing power to a small set of people who progressively lose touch with what the market actually needs.

It doesn't matter if its "public" or "private" it's the concentration that causes the negative effects.

Made more annoying by how difficult it is to explain that simple concept to the pseudo libertarian crowd that tends to congregate here.

Re: WeWork Warns of Possible Bankruptcy

#85

Post by Terretta »

smileysteve wrote: post #69
Aeolun wrote: post #46

Earlier quoted context omitted.

Their dedicated office space is just absurdly expensive. I'd pay $2000/month for a 10sqm office when I can get a 20sqm office from the market for $1000/month. Of course the locations are not equivalent, but it's just not really relevant for those of us working remote anyway.

But $1000 a month seems cheap compared to an office manager? That is, a dedicated employee for receiving, kitchen stocking, security management, and even utility management (how many novice office managers try cable Internet before buying fiber)

Yes, and an office manager that doesn't have to be told what to do about anything, who actually manages workplace facilities, equipment, and operations fully autonomously, is likely to run between $5K and $10K a month, at least (more if salaried with benefits).

Re: WeWork Warns of Possible Bankruptcy

#86

Post by hn_throwaway_99 »

Aeolun wrote: post #46
sarreph wrote: post #14

In my opinion the writing for a way out of this mess has been on the wall for a long time now, post-Covid. This is with the only viable, but still heavily under-utilized product they have left: hot-desking and community workspaces. Having rented multiple dedicated offices from WeWork I can attest that the corridors are become more and more like a post-apocalyptic landscape as the tenants — no longer taking advantage…

Their dedicated office space is just absurdly expensive. I'd pay $2000/month for a 10sqm office when I can get a 20sqm office from the market for $1000/month. Of course the locations are not equivalent, but it's just not really relevant for those of us working remote anyway.

It's exactly this. Our company got a great, large dedicated office space during the peak of Covid for a pretty great deal. Note at the time it was still one of the most expensive options, but the location, amenities and quality of the office space made it worth it.

When it came time to renew they tried to more than double the rent. We then downsized to a space less than a fourth the original space - just a couple desks and a small meeting room. That worked out great - most employees are now firmly remote anyway, but we have a good space, and anyone can use our block of credits, so if we need to have a bunch of folks onsight for an in-person meeting we just book a large meeting room and it works great.

I think WeWork was horribly mismanaged by Neumann, but I still think they'd be in giant doodoo even if they had great management. The pandemic really fundamentally changed work patterns forever.

Re: WeWork Warns of Possible Bankruptcy

#87

Post by thisgoesnowhere »

shaoonb wrote: post #15

My company recently moved from a wework equivalent to a much cheaper serviced office. A few less of the flashy features and perhaps a slightly less prestigious address (5 minutes down the road) for a third of the price.

The idea that this was a tech company because they have a integrated portal for management of your office subscription was always laughable.

The multiples were ridiculous for what basically is a internet connected REIT.

Re: WeWork Warns of Possible Bankruptcy

#88

Post by antihero »

itsoktocry wrote: post #72
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 accumu…

This is just capitalism working as intended.

Re: WeWork Warns of Possible Bankruptcy

#89

Post by easyThrowaway »

Aeolun wrote: post #55
ramraj07 wrote: post #6

Earlier quoted context omitted.

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 ?

Because it's who you know, rather than what you know, that drives the VC ecosystem for the most part.

They know that one day Adam Neumann is gonna sit on the other side of the table, and whoever is clearing the financing right now will take his turn in proposing his AI-crypto-{NEW TREND HERE} venture and get the money.

Re: WeWork Warns of Possible Bankruptcy

#90

Post by edgyquant »

antihero wrote: post #88
itsoktocry wrote: post #72

Earlier quoted context omitted.

> 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 accumu…

This is just capitalism working as intended.

No, quite the opposite actually
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