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I’m really disgusted by how much recent tech IPOs inject pitch deck-style garbage into the S-1 filing, especially this one. I’ve always had a great amount of re

• anilshanbhag 7y ago
  I for one think those photos / charts are important as otherwise you won't understand how big WeWork is. Couple of days ago I was casually checking Wework locations and was surprised that they have 24 locations in Beijing, 10 in Bangalore, 21 in Tokyo ! They are everywhere.
  • beager 7y ago
    It’s trivial to convey that information in plain text
    • erikig 7y ago
      I don't think so - each of these locations are owned by joint venture subsidiaries (IndiaCo, JapanCo etc). Without a diagram like that on page 16, it would be near impossible for an investor to understand how their investment in the IPO relates to these subsidiaries.
  • mruts 7y ago
    I mean, you just managed to do it with just words alone.
• tw1010 7y ago
  There's still deception even if companies use dry language. Using deck-style language only makes it that obvious and easier to decipher.
• JumpCrisscross 7y ago
  > they’re blown out by marketing photos, full-page charts, and branding Companies get a lot of latitude with the first few pages. Seasoned S-1 skimmers peruse that stuff, but save the digging in for the risk factors, financials and the accompanying notes.
  • impalallama 7y ago
    Lmao, pages 157-160 are straight up magazine-esq full page adds for other companies (SalesForce, DropBox, etc)
    • nwsm 7y ago
      147-150
      • deleted 7y ago
        [deleted]
  • maroonshifter 7y ago
    Nit, peruse means to read carefully with an attention to detail.
    • JackFr 7y ago
      "Peruse can mean 'to read something in a relaxed way, or skim' and can also mean 'to read something carefully or in detail.' Peruse is thus a contronym because it has multiple definitions that seem contradict each other." https://www.merriam-webster.com/words-at-play/peruse-usage https://www.merriam-webster.com/words-at-play/peruse-usage
      • maroonshifter 7y ago
        Yes I realized this, but this makes the word unnecessarily ambiguous and this new definition is the purely the result of enough people using the word incorrectly long enough. We don't mean "destroy 10%" when we use the word decimate anymore, I get it. Natural language, migration of meaning, subjective denotation etc.
• nickdandakis 7y ago
  I'd agree except WeWork's emphasis on design is a huge reason they have become this big in the first place.
  • ohashi 7y ago
    It's a public offering, WeWork didn't invent design. That's a terrible argument.
    • mattmar96 7y ago
      Not a terrible argument. Investors are people too. They can be swayed by nice looking things. 2nd page, yellow background - can't tell me that doesn't give you a sense they have their shit together. All that being said - I won't be investing ha.
    • nickdandakis 7y ago
      My argument is that they're using the same strategy, language and branding they used to sell their brand to the world to sell their public offering to the world. I don't perceive that as detrimental, and don't see how designing a document is "disgusting". It's nontraditional.
      • dwaltrip 7y ago
        But that isn't what an S-1 is supposed to be, from my understanding. It isn't a marketing document -- they are warping it.
    • tw1010 7y ago
      Yeah, I see this as a pretty interesting illustration at how poor engineers are at figuring out how things actually function in the world for anything other than products.
  • randolando 7y ago
    Indeed, presumably they have paid a sizable team of designers quite well to create these diagrams, graphs, etc. I was impressed by all the varied ways they have visualized their "data". The tipping scale, for instance, gives a clear before/after projection while being much more visually interesting than a plain graph. Not to say that I believe all of it, but I do think visually appealing and/or dazzling graphics do have an effect on some types of people. Conscious or not.
• rolltiide 7y ago
  I think it is interesting. There are new paths to going public in the last several years, specifically because the government had made it too expensive to go public and be public primarily after Enron. One decade of companies coming to terms with staying private, one decade of companies coming to terms with the new ways of going public. So they loosened that up and the industry reacts.
• srehnborg 7y ago
  I see this differently. This is a government document, but one that investors will read now and refer back to in the future. Why make it plain boring text when you can spin this document into a reason to invest? This is an opportunity to tell the world who you are. Interested parties read these for a reason. It might as well look how you want it to look, as long as the same necessary content is listed.
  • elliekelly 7y ago
    > Why make it plain boring text when you can spin this document into a reason to invest? That's exactly what the document was designed not to do. It's meant to convey facts, not "spin." Why do we use plain boring text on a prescription label? So the important disclosure information is readily available to consumers in a consistent and uniform format. The same logic applies to SEC filings.
  • wpietri 7y ago
    You've answered your own question. Spin is manipulation: https://en.wikipedia.org/wiki/Spin_(propaganda) https://en.wikipedia.org/wiki/Spin_(propaganda) The theory of well-regulated public markets is that all investors and all seekers of cash are put on an equal playing field. The goal is to maximize public confidence in the markets, which in turn maximizes the total useful investment. If hype becomes dominant, that will reduce overall returns and increase return variability. That in turn will reduce investor confidence, which reduces available capital, which reduces economic growth. I understand that in the US we spend ~$500 billion a year on commercial manipulation, so it can seem normal. But it doesn't have to be, and maybe it shouldn't.
  • ryacko 7y ago
    It looks like the management was involved in writing their own biographies. I can see why some people would want to spice up their IPO.
• AJ007 7y ago
  It can also serve as a major red flag, when a company adds in a bunch of unnecessary things while excluding things that aren’t required, but are critical, to valuations such as churn rates. This was a big one in Uber’s filings where it looked like they were probably mixing in Uber Eats to hide flat or declining usage of the actual ride sharing service. Public companies changing how something has been historically reported also raises similar questions. Report the metrics that look amazing, exclude, merge, or mask the stuff that looks bad.
  • i_am_nomad 7y ago
    Or pull a Groupon and just completely redefine several accounting concepts, e.g. list marketing costs as capital expenditures.
    • fgonzag 7y ago
      I don't get that one. How are they justifying placing marketing as Capex instead of Opex? What is the advantage? Are they saying marketing is a depreciating asset?
      • i_am_nomad 7y ago
        IIRC, their argument is that marketing builds brand awareness, and brand awareness is a capital good.
• dctoedt 7y ago
  WeWork's litigation counsel might have wanted the pitch-deck stuff to go into the S-1 to make the information more understandable to non-business people. That way, the pitch deck would be an official part of the record; in turn, this would mean a couple of things: 1. If disgruntled investors were to sue WeWork, the pitch-deck material could be referred to by WeWork's counsel in tactical maneuvering such as a motion for judgment on the pleadings, without having to jump through all the hoops that might otherwise be required; 2. Worst case, if a lawsuit ended up going all the way to a jury trial, the pitch-deck material presumably would be sent back into the jury room as a "real" exhibit, allowing the jury to review the pitch-deck material during deliberations. (The jurors might even be given individual notebooks with copies.) In contrast, if the pitch deck were left out of the S-1, the judge might or might not allow it to go back into the jury room, especially if it were a so-called demonstrative exhibit prepared for the litigation. (I teach my contract-drafting students to draft agreements with an eye toward being readable by judges and jurors, with tables, footnotes, non-legalese language etc. — and if the contract language is understandable to a juror, then the parties' business people will be able to get to signature more quickly and are less likely to get into disputes afterwards.)
  • notyourday 7y ago
    Yeah, except that's not how this works outside the theoretical realm. In practice, those that actually took companies public know that the more terrible crap you throw into the S-1 ( pitch deck included ) as long as you state that risk-wise you are probably a terrible investment for the public, the better protected you are from the lawsuits in the future when the public's investment does not pan out: you say 'we are doing X and this is our rosy pie in the sky pitch deck, but we must tell you the risk is that none of this is helping us to make money. Buyer beware' Should one look at the S-1s of the tech companies that went public in last 4-5 years one would see that pattern Source: Attorneys engaged by the investment banks to help companies to IPO.
    • dctoedt 7y ago
      This is also true. Back when I was drafting my then-company's Form 10-K annual reports, for just that reason I loaded up the risk section with a list of all the things that could go wrong, based on studying similar lists from the big software companies. It's sometimes known as vaccination or inoculation — "hey, we told you all these things that could make our stock price go south!" (The danger with this approach, of course, is that if you inadvertently leave something out, the plaintiffs' lawyers will spotlight the omission and argue, "they LIED!")
• deleted 7y ago
  [deleted]
• anonu 7y ago
  This sounds very curmudgeonly of you - and I say that in the nicest way. I empathize with your point of view - but I think the graphics promote an important view into how the company perceives themselves. This is also important for investors to take into account. You can skip the first dozen pages and get to the meat of the S1 further down.
• pbreit 7y ago
  I feel the opposite. The boilerplate S-1 stuff can be very mis-leading and unhelpful when trying to figure out how the business is and can work.
• rossdavidh 7y ago
  While I would agree, I am a programmer, as are many other HN commenters, and even those who aren't are the sort of people who are ok with being on a forum filled with a bunch of programmers. That "garbage" might actually be more readable to a different slice of the public, that finds the "dry" parts so boring as to be unreadable. Just a hypothesis, I have no data to back that up, but maybe some people find the term paper more digestible with a little perfume?