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

91–100 of 150 posts

Re: WeWork Warns of Possible Bankruptcy

#91

Post by notahacker »

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…

> at a time when valuations were soaring and there was a renewed push for an IPO. Neumann could have blocked that.

"We invested in a company structured so that the CEO could hold us to ransom, and agreed the bad terms because we thought the CEO would have breached his fiduciary duty to other shareholders and blocked advantageous exits if we didn't pay his ransom first" doesn't sound any better...

Re: WeWork Warns of Possible Bankruptcy

#92

Post by hn_throwaway_99 »

fredgrott wrote: post #33
PedroBatista wrote: post #11

Should have happened in 2021 but our "brightest VC minds" thought it would be a good idea to burn even more "free" money on this pit. To be fair, WeWork is just another roll of the dice company from the Uber era of free money. Let's pump it up and become too-big-to-fail! It appears WeWork wasn't big enough.. And they can blame COVID all they want, but the business model was already showing sights of failure before 20…

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…

> 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.

This is voodoo statistics and just plain bad math, a bit like what I like to call "astrology technical analysis". Actual populations don't fit as nice into specific generations that demographers like to put them in. People enter and leave the workforce all the time.

Re: WeWork Warns of Possible Bankruptcy

#93

Post by JumpCrisscross »

NoGravitas wrote: post #61
JumpCrisscross wrote: post #29

Earlier quoted context omitted.

> Neumann and the other VCs already exit scammed out of it with their millions and additionally dumped on retail Given the outright fraud prevalent in today’s tech landscape, it’s difficult to call WeWork a scam. Stupid, yes. But fraud; for that we lack evidence.

It's a commercial property management company that identifies as a tech company to get dumb investment money. Maybe not outright fraudulent, but definitely scammy.

> Maybe not outright fraudulent, but definitely scammy

Scams are attempts to defraud. No fraud, no scam. If it feels scammy, that means (or should mean) you sense fraud.

I know this seems pedantic. But drawing clearly that line--between fraud and blind optimism--seems like a good takeaway from this past cycle.

Re: WeWork Warns of Possible Bankruptcy

#94

Post by [deleted] »

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.

[deleted]

Re: WeWork Warns of Possible Bankruptcy

#95

Post by hn_throwaway_99 »

benjaminwootton wrote: post #83
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?

> He built an enormous global business and brand.

Why do people think selling dollars for 75 cents is some incredible achievement to be lauded?

Re: WeWork Warns of Possible Bankruptcy

#96

Post by rapatel0 »

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...

Softbank vision fund was poorly designed. At a 100 billion size, the fund must deploy a ton of money to create venture returns. Assuming a 10 year maturity and 5 years of investment period, they would need to deploy 20 billion per year into companies just to run the fund. If you invest in 100 companies then check-size must be a few hundred million to billions of dollars.

Implications: They then pushed companies to expand way faster then was appropriate. This meant that companies made decisions that was not justified by the profitability, just because they needed to spend the money.

An example would be when WeWork started offices in most expensive areas of manhattan and served them to customers at effective discount, hoping that the market would shift. Originally, WeWork took office space in distressed areas and made them viable for companies to use at a markup--creating value and being profitable overall. Under the pressure, they made stupid unprofitable decisions. Under this environment, even solid companies are forced to spray and pray money.

Generally speaking, money brings greater velocity but founders and investors should understand if the market will change at the same rate. For WeWork, commercial office space has leases with lengths of 5-10 years. Bottomline, there is not enough "liquidity" to absorb that quick an expansion.

Re: WeWork Warns of Possible Bankruptcy

#97

Post by danjac »

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 ?

He's a made man, as the Mafia used to say. Once you're in the circle you can keep failing upwards.

Re: WeWork Warns of Possible Bankruptcy

#98

Post by hn_throwaway_99 »

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…

Still more amazing to me is that he got a16z to invest 350 million into his new real estate debacle just after all this. This dude must really be a master hypnotist or something.

Re: WeWork Warns of Possible Bankruptcy

#99

Post by coldpie »

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 ?

One hopes the last 10 years have proven beyond any doubt that personal wealth & success are in no way correlated with skills or value to society.

Re: WeWork Warns of Possible Bankruptcy

#100

Post by mertbio »

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…

They decreased their price in Hamburg a lot. It was around 40€/day for hot desks, now it is around 20€/day.
Post reply on HN