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WeWork Bonds Drop Below Par for First Time Since IPO Filing

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Re: WeWork Bonds Drop Below Par for First Time Since IPO Filing

#91

Post by nabdab »

cs702 wrote: post #37

It's remarkably easy to make fun of WeWork, given the company's high-as-a-kite ambitions, its largely conjectural business model, its dependence on fresh capital for survival, its charismatic CEO’s new-age antics, and its disregard for conventional norms of ethical corporate behavior.[a] But if the IPO of a company as prominent as WeWork fails and the company is unable to raise the fresh capital it needs to stay aflo…

Framing the entire market as “either you buy into this single obvious scam or everything falls apart” is extreme. WeWork has been a gamble throughout, and the latest antics just pushed investors from “yes its a bad investment long term but short term I’ll make a profit” into straight up “this bag is on fire and I’m sure it’s filled with shit so I’ll let someone else step on it”. Wework failing is not going to trigger a complete market collapse. When Theranos blew up the next Monday was business as usual for every single other company.

Re: WeWork Bonds Drop Below Par for First Time Since IPO Filing

#92

Post by noneeeed »

wastedhours wrote: post #39
chadash wrote: post #14

Earlier quoted context omitted.

> It just seems like WeWork took an existing business model of renting office space, went all VC and gathered a bunch of money and sky high evaluation (toss in some creepy insider dealing) ... and ... that's it. That is basically what they did, but they also marketed it really well and made the process seamless. Everyone points to Regus as an example of a company that already existed in WeWork's space, but as far as…

I heard about Regus years before I'd ever heard of WeWork, however, all of the other new players in the space (barely a week goes by without seeing an ad for a new building in London with flexible offices and coworking) have only really gained visibility since. Have a feeling the newer, smaller players with more limited portfolios (and exposure) might survive better.

There is a place near me that is part of Regus, but you wouldn't know it, it's very much positioned as a co-working style location. They seem to be using the tactic of setting up parallel brands that don't have the baggage of the old, but have access to their capital, management and expertise.

I frankly don't see We work having any long term advantage over any of the other big players.

Re: WeWork Bonds Drop Below Par for First Time Since IPO Filing

#93

Post by linuxftw »

nradov wrote: post #29
linuxftw wrote: post #6

Earlier quoted context omitted.

> It does not seem to be a viable business so this makes sense. Many businesses that IPO aren't viable, the problem is when the general public figures that out. For instance, snap chat. In no way a viable business, but has plenty of investors thanks to the wall street scam of institutional investors (401ks, etc) buying entire sectors of an exchange. It's a nice scheme to ensure you bail out your 'venture capitalist'…

The vast majority of 401(k) money is in large-cap mutual funds which don't invest in IPOs.

Current top institutional holder: Vanguard Group [1]. It's almost like they specialize in mutual-funds and 401k's.

1: https://finance.yahoo.com/quote/SNAP/holders/

Re: WeWork Bonds Drop Below Par for First Time Since IPO Filing

#94

Post by fastball »

nabdab wrote: post #91
cs702 wrote: post #37

It's remarkably easy to make fun of WeWork, given the company's high-as-a-kite ambitions, its largely conjectural business model, its dependence on fresh capital for survival, its charismatic CEO’s new-age antics, and its disregard for conventional norms of ethical corporate behavior.[a] But if the IPO of a company as prominent as WeWork fails and the company is unable to raise the fresh capital it needs to stay aflo…

Framing the entire market as “either you buy into this single obvious scam or everything falls apart” is extreme. WeWork has been a gamble throughout, and the latest antics just pushed investors from “yes its a bad investment long term but short term I’ll make a profit” into straight up “this bag is on fire and I’m sure it’s filled with shit so I’ll let someone else step on it”. Wework failing is not going to trigger…

There are a lot of big startups without a good business model who have been surviving on copious amounts of easy capital.

Re: WeWork Bonds Drop Below Par for First Time Since IPO Filing

#95

Post by fastball »

Litmus2336 wrote: post #70
mrweasel wrote: post #63

Earlier quoted context omitted.

Shouldn’t “show me the profit” have been the basis for investing all the time? It’s the growth at all cost that’s dangerous.

There are valid reasons to invest in a company that doesn't make profit now, but will in the future. Almost every business has this phase - it could be short (a lawnmower company that goes 5k in the hole for equipment) or big (a company with an idea to revolutionize the DVD to consumer marketplace, that starts operating at a loss until they build up the required customerbase). Now, the big issue is that everyone thin…

I think the problem is less companies that don't make profit and more all the companies that have raised a lot of capital without making that much revenue.

Re: WeWork Bonds Drop Below Par for First Time Since IPO Filing

#96

Post by bksenior »

cs702 wrote: post #37

It's remarkably easy to make fun of WeWork, given the company's high-as-a-kite ambitions, its largely conjectural business model, its dependence on fresh capital for survival, its charismatic CEO’s new-age antics, and its disregard for conventional norms of ethical corporate behavior.[a] But if the IPO of a company as prominent as WeWork fails and the company is unable to raise the fresh capital it needs to stay aflo…

yea, no. It's simply an overpriced asset and the market is concerned that without an adjustment there isnt much room to grow in value.

I dont think anyone think WeWork is not a strong business model. Id even take it one step further in that it's not the cash burn thats really killing people, it's the valuation. I know theyre connected as a larger company should hypothetically be able to sell less of itself for more money, but at 1/3 of the valuation I think the market feels different about the biz. Although the social signal of being forced to cut does some real bad psychological voodoo.

Re: WeWork Bonds Drop Below Par for First Time Since IPO Filing

#97

Post by alexis_fr »

nabdab wrote: post #91
cs702 wrote: post #37

It's remarkably easy to make fun of WeWork, given the company's high-as-a-kite ambitions, its largely conjectural business model, its dependence on fresh capital for survival, its charismatic CEO’s new-age antics, and its disregard for conventional norms of ethical corporate behavior.[a] But if the IPO of a company as prominent as WeWork fails and the company is unable to raise the fresh capital it needs to stay aflo…

Framing the entire market as “either you buy into this single obvious scam or everything falls apart” is extreme. WeWork has been a gamble throughout, and the latest antics just pushed investors from “yes its a bad investment long term but short term I’ll make a profit” into straight up “this bag is on fire and I’m sure it’s filled with shit so I’ll let someone else step on it”. Wework failing is not going to trigger…

...and a healthy market must make bad ones go under. Some of those companies should have been stopped way earlier.

Re: WeWork Bonds Drop Below Par for First Time Since IPO Filing

#98

Post by nradov »

linuxftw wrote: post #93
nradov wrote: post #29

Earlier quoted context omitted.

The vast majority of 401(k) money is in large-cap mutual funds which don't invest in IPOs.

Current top institutional holder: Vanguard Group [1]. It's almost like they specialize in mutual-funds and 401k's. 1: https://finance.yahoo.com/quote/SNAP/holders/

Those Vanguard holdings were purchased in the secondary market after SNAP market cap reached certain thresholds. Vanguard bought little or nothing in the IPO.

Re: WeWork Bonds Drop Below Par for First Time Since IPO Filing

#99

Post by RyanAF7 »

alexis_fr wrote: post #97
nabdab wrote: post #91

Earlier quoted context omitted.

Framing the entire market as “either you buy into this single obvious scam or everything falls apart” is extreme. WeWork has been a gamble throughout, and the latest antics just pushed investors from “yes its a bad investment long term but short term I’ll make a profit” into straight up “this bag is on fire and I’m sure it’s filled with shit so I’ll let someone else step on it”. Wework failing is not going to trigger…

...and a healthy market must make bad ones go under. Some of those companies should have been stopped way earlier.

Yeah, namely Amazon.

Re: WeWork Bonds Drop Below Par for First Time Since IPO Filing

#100

Post by linuxftw »

nradov wrote: post #98
linuxftw wrote: post #93

Earlier quoted context omitted.

Current top institutional holder: Vanguard Group [1]. It's almost like they specialize in mutual-funds and 401k's. 1: https://finance.yahoo.com/quote/SNAP/holders/

Those Vanguard holdings were purchased in the secondary market after SNAP market cap reached certain thresholds. Vanguard bought little or nothing in the IPO.

It doesn't matter if they buy during or shortly after an IPO, the fact of the matter is that there's some value there just by virtue of being listed because you will most definitely get institutional investors based on that fact alone. Institutional investors set the market, everyone else is playing the spread.

Can you give me an example of a company that IPO'd profitless and the largest shareholders aren't institutional investors that do broad-index-based purchases?

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