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WeWork Gets a Visit from Financial Reality

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Re: WeWork Gets a Visit from Financial Reality

#91

Post by iamben »

1024core wrote: post #80
simias wrote: post #56

Earlier quoted context omitted.

Hindsight is 20/20. Maybe people in 1999 were wrong about Amazon but they were right about Pets.com and many others, your comment is just an example of survivorship bias. I mean, I'm sure you're not trying to argue that dotcom valuations weren't generally ridiculous. Besides, Amazon, Kodak and Boeing were never exactly in the same market. The parent is comparing companies that ostensibly offer similar services. If I…

> but they were right about Pets.com WebVan is another such example.

And let's not forget boo.com ... https://en.wikipedia.org/wiki/Boo.com

Re: WeWork Gets a Visit from Financial Reality

#92

Post by usefulcat »

lsc wrote: post #74
projectramo wrote: post #19

Earlier quoted context omitted.

You're right on Tesla and WeWork, but not on Uber. Uber doesn't buy and own the car, which means it requires much less capital. This small change has many implications, and the tech helps solves many of the problems that come up. I am not saying it is properly valued (over or under or whatever). Just that given the choice between an Uber (or Lyft or yourlocalapp.com) or a cab company with the same fleet, customers, a…

>Uber doesn't buy and own the car, which means it requires much less capital. This small change has many implications, and the tech helps solves many of the problems that come up. that can go both ways: If I have to buy a fleet of cars big enough to cover my area and write an app and advertise to compete with uber, that sounds like an expensive proposition. If all I have to do is come up with an app and the advertisi…

Exactly. The service currently provided by Uber is very much a commodity, both for drivers and riders.

Re: WeWork Gets a Visit from Financial Reality

#93

Post by kgwgk »

https://www.bloomberg.com/opinion/articles/2019-01-08/wework...

"In addition to the corporate finance weirdness: “Going forward, the company will no longer be called WeWork but rather The We Company.” (“The switch is not a legal name change,” okay.) And: “Rather than just renting desks, the company aims to encompass all aspects of people’s lives, in both physical and digital worlds,” which is—and I have spent years writing about the financial and tech industries and do not say this lightly—the very worst corporate slogan I have ever heard.

Me: What does your company do?

We: We encompass all aspects of your life, in both physical and digital worlds.

Me: Wait that’s terrifying.

We: We’re like Facebook, only you also live here.

Me: Who did you say you are again?

We: We are We.

The new company will be divided into several main business units: WeWork, WeLive, WeGrow, WeHarvest and WeFeast, wait no only the first three of those are real, but I am looking forward to when they start a line of industrial-chic funeral homes, WeDie. (Free beer at the wake!) Seriously WeGrow (real!) is “a still evolving business that currently includes an elementary school and a coding academy.” And WeWhatever’s founders once (in 2009!) “mapped out plans for everything from WeSleep to WeSail to WeBank.” I can’t keep up with this."

Re: WeWork Gets a Visit from Financial Reality

#94

Post by olivermarks »

1024core wrote: post #80
simias wrote: post #56

Earlier quoted context omitted.

Hindsight is 20/20. Maybe people in 1999 were wrong about Amazon but they were right about Pets.com and many others, your comment is just an example of survivorship bias. I mean, I'm sure you're not trying to argue that dotcom valuations weren't generally ridiculous. Besides, Amazon, Kodak and Boeing were never exactly in the same market. The parent is comparing companies that ostensibly offer similar services. If I…

> but they were right about Pets.com WebVan is another such example.

> but they were right about Pets.com > WebVan is another such example.

Timing was wrong, too early. Chewey sold for 3 billion in late 2017 to petsmart, a less online savvy box store https://www.recode.net/2017/12/6/16681040/ryan-cohen-chewy-r...

Re: WeWork Gets a Visit from Financial Reality

#95

Post by JumpCrisscross »

zrobotics wrote: post #84
JumpCrisscross wrote: post #71

Earlier quoted context omitted.

> How will they defend their valuation if the self driving project doesn't pan out? They’re already profitable in New York and San Francisco.

Profitability doesn't mean defensible though. What separates them from their competitors? That is the point I'm making, not that they are unprofitable.

> What separates them from their competitors?

Scale. One can reliably get an Uber almost anywhere. That makes it attractive to travelling businesspeople and jet setters, two price insensitive customer segments that Uber almost singularly dominates.

Network effects. Ubers are almost always among the fastest transportation options in most cities.

Breadth. I never use Uber Eats, but apparently it’s doing quite well.

(I don’t know if the above gets me to $70bn. It does, however, point to a gargantuan business.)

Re: WeWork Gets a Visit from Financial Reality

#96

Post by vm »

scandox wrote: post #5
Traster wrote: post #4

>The Gulf investors backing the Vision Fund seem to have decided that WeWork is not a tech bet but simply an aggressive punt on real estate. This is the bogey man of a huge number of current 'tech startups' - What if it turns out Tesla really are a car company! Or if We Work are actually an office rental company! OR gasp Uber is a cab company! (1) We now have a glut of companies operating in traditional markets that…

In 1999 there was an email going round about how ridiculous dotcom valuations were. Taking Amazon, I think, as an example it said it would have to earn more than Kodak, Boeing, Caterpillar etc to ever be worth it's valuation. There was a general sense of "it's just a bookstore". Now I know everything is more mature and the situation is different, but I also remember feeling very confident that Amazon was waaay overva…

Amazon was also overvalued in 1999. It took almost a decade to get back to its dotcom valuation. Amazon of 1999 and 2009 were two very different companies.

Re: WeWork Gets a Visit from Financial Reality

#97

Post by dragonwriter »

scandox wrote: post #5
Traster wrote: post #4

>The Gulf investors backing the Vision Fund seem to have decided that WeWork is not a tech bet but simply an aggressive punt on real estate. This is the bogey man of a huge number of current 'tech startups' - What if it turns out Tesla really are a car company! Or if We Work are actually an office rental company! OR gasp Uber is a cab company! (1) We now have a glut of companies operating in traditional markets that…

In 1999 there was an email going round about how ridiculous dotcom valuations were. Taking Amazon, I think, as an example it said it would have to earn more than Kodak, Boeing, Caterpillar etc to ever be worth it's valuation. There was a general sense of "it's just a bookstore". Now I know everything is more mature and the situation is different, but I also remember feeling very confident that Amazon was waaay overva…

> In 1999 there was an email going round about how ridiculous dotcom valuations were.

Which, while some of the examples sometimes quoted survived, was generally validated by the 2000 crash.

Re: WeWork Gets a Visit from Financial Reality

#98

Post by IanCal »

projectramo wrote: post #19
Traster wrote: post #4

>The Gulf investors backing the Vision Fund seem to have decided that WeWork is not a tech bet but simply an aggressive punt on real estate. This is the bogey man of a huge number of current 'tech startups' - What if it turns out Tesla really are a car company! Or if We Work are actually an office rental company! OR gasp Uber is a cab company! (1) We now have a glut of companies operating in traditional markets that…

You're right on Tesla and WeWork, but not on Uber. Uber doesn't buy and own the car, which means it requires much less capital. This small change has many implications, and the tech helps solves many of the problems that come up. I am not saying it is properly valued (over or under or whatever). Just that given the choice between an Uber (or Lyft or yourlocalapp.com) or a cab company with the same fleet, customers, a…

> Uber doesn't buy and own the car, which means it requires much less capital.

That sounds the same as all cab companies I know of that have operated in the UK for years.

Re: WeWork Gets a Visit from Financial Reality

#99

Post by ritchiea »

kgwgk wrote: post #93

https://www.bloomberg.com/opinion/articles/2019-01-08/wework... "In addition to the corporate finance weirdness: “Going forward, the company will no longer be called WeWork but rather The We Company.” (“The switch is not a legal name change,” okay.) And: “Rather than just renting desks, the company aims to encompass all aspects of people’s lives, in both physical and digital worlds,” which is—and I have spent years w…

Yea it sounds like the kind of corporate slogan you come up with when you have to prove you're not just a real estate company and that your company has exponential growth potential rather than a slogan expressing something anyone wants.

Re: WeWork Gets a Visit from Financial Reality

#100

Post by ptero »

scandox wrote: post #5
Traster wrote: post #4

>The Gulf investors backing the Vision Fund seem to have decided that WeWork is not a tech bet but simply an aggressive punt on real estate. This is the bogey man of a huge number of current 'tech startups' - What if it turns out Tesla really are a car company! Or if We Work are actually an office rental company! OR gasp Uber is a cab company! (1) We now have a glut of companies operating in traditional markets that…

In 1999 there was an email going round about how ridiculous dotcom valuations were. Taking Amazon, I think, as an example it said it would have to earn more than Kodak, Boeing, Caterpillar etc to ever be worth it's valuation. There was a general sense of "it's just a bookstore". Now I know everything is more mature and the situation is different, but I also remember feeling very confident that Amazon was waaay overva…

IMO Amazon and most other dotcom companies were waaay overvalued at the tail end of the dotcom boom and many companies with hefty valuations from those days do not exist today.

What made Amazon survive (and achieve valuations way in excess of those in 1999) was not the fact that it had something super valuable then, but that it relentlessly innovated, stayed flexible (an online bookstore offering a computing cloud services, what a weird idea) and executed well enough. And had enough money and controlled costs well enough to reach profitability. For every Amazon there are hundreds of Enrons and WorldComs.

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