11 ms·

I don't understand why all analysis of the craziness that is The We Company is filled with opaque language and colorful mind bending terms. The company is a fra

by mola 7y ago

I don't understand why all analysis of the craziness that is The We Company is filled with opaque language and colorful mind bending terms. The company is a fraud, it should be explained with facts, and clear simple language. Everything else is just muddying the water.

logicallee 7y ago
>it should be explained with facts, and clear simple language. since it looks like you've spent some time on this, would you care to take a shot?
- mola 7y ago
  What makes you think I understand this? my comment originated from the opaque language which read more like works of satire than actual analysis. All I can tell is that the whole way this company and its investors are acting is bat shit crazy. I'd like to get better analysis that is less "entertainment" and more factual and analytical.
  - ramraj07 7y ago
    It's actually just satire with numbers. Which seems better than satire by itself by a mile, and (personally) also better than rote numbers listed because it's amusing. Why complain?
  - logicallee 7y ago
    >What makes you think I understand this? The fact that you stated "The company is a fraud", before saying that this should be stated plainly. Since you didn't say something like "...from my point of view I certainly have the impression that..." or something like that. Since you spoke definitively, I assumed you have a definite opinion you formed somehow.
simplecomplex 7y ago
How is it fraud? Investors make idiotic investments. Nobody is being forced to buy shares of WeWork, and all the financials are there. It’s not like WeWork is lying about financials.
- doctorpangloss 7y ago
  My assumption is these investors know what they’re doing. So they’ve structured things to sell a bag to the public, arbitraging the difference between reality and regulatory requirements/what is documented generally. A conversation about fraud often litigates whether or not omission is a form of lying.
  - simplecomplex 7y ago
    What did they omit that constitutes a lie in your opinion?
- pixelpoet 7y ago
  Consider the illegality of Ponzi scheme: nobody is forced to participate, investors make idiotic investments, and yet, because of the essentially certain loss of money, it can be regarded as knowingly defrauding the investor.
  - simplecomplex 7y ago
    A Ponzi scheme lies about the source of returns. WeWork is not lying about any financials. WeWork is not a Ponzi scheme and you know it.
paultopia 7y ago
I know almost nothing about finance, and the only things I had to look up in the linked post were "EBITDA," "DJIA" (which turns out to just be an acronym for the Dow Jones) and "flywheel effect." Seems pretty plain to me.
- baby 7y ago
  Because I'm a huge noob too I googled these terms: * EBITDA or Earnings Before Interest, Tax, Depreciation and Amortization. It's pretty much the net (before-tax) income of the company (per year), but after expenses that are easy to calculate (like employees' salaries and rent). * DJIA or Dow Jones Industrial Average. It seems to be an index of the stock market, meaning a number calculated from the price of a selected number of stocks (in practice, 30 large US companies). * The Flywheel Effect. I guess to understand this one you need to understand what a flywheel is, it seems to be a pretty heavy wheel. The metaphor here is that building a successful company is like pushing a massive wheel for a very long time until it catches some momentum and roll by itself?
  - deleted 7y ago
    [deleted]
  - agrover 7y ago
    And that can be used to spin up secondary revenue streams more easily than starting from scratch.
  - unreal37 7y ago
    It's worth noting that the DJIA comment was specifically mentioned because it contains only 30 companies and a terrible indicator of the overall health of all American companies. But it's used as the primary indicator of the health of American companies in nightly news reports. "Similar to the DJIA, last-round private valuations are harmful metrics that create the illusion of prosperity." A lot of people just wish the DJIA 30 would disappear from popular use. It's a harmful metric that gives the illusion of prosperity.
    - 7y ago
endorphone 7y ago
A lot of the behaviors of the founder seem outrageously fishy, however they are legitimately filling a rapidly growing need. At this very moment I have the WeWork Toronto locations page open as I contemplate biting the bullet on a private office there just to get out of the home office occasionally.
- jngreenlee 7y ago
  Be sure to cost/feature compare too! https://www.regus.ca/office-space/canada/ontario/toronto https://www.regus.ca/office-space/canada/ontario/toronto
  - chx 7y ago
    Frankly, this is what I don't understand in this whole charade. IWG has a decent 2.5 billion yearly revenue and wringes a paltry 0.1B net income out of it. I mean, good for you, employing near 10 000 people and still being profitable but still, a 4% profit margin. That's razor thin and it's not immediately visible what WE is going to do so much better -- or better at all.
- yao420 7y ago
  There are dozens of non-WeWork coworking spaces across Toronto.
  - endorphone 7y ago
    For sure, though the common model seems to be going in a class B building on a highway somewhere on the periphery and setting up an incredibly drab, soul crushing office. I've worked for Bell and RBC -- I've already done the soul crushing office thing. I have absolutely no doubt that I've missed some good ones, but that's how WeWork made me interested in something that I'd put off for so long -- really nice looking interiors in great parts of town/great buildings. They are in no way a tech company, however their aesthetic and values do more closely mirror tech companies than a lot of their competitors that are low cost satellite office providers for low-tier organizations.
JumpCrisscross 7y ago
> The company is a fraud This is extreme. Adam’s self-dealing is abundantly disclosed. There is no evidence he is acting in bad faith. (Versus being deluded himself.) Lots of businesses leverage paper-thin margins. Lots of businesses borrow short and lend long. Lots of businesses, particularly real estate businesses, feature self-dealing and family control galore. American corporate law goes out of its way to avoid criminalising stupidity. There is a chance WeWork attains enterprise lock-in sufficient to let it weather a storm. There is a chance it expands cross-selling to bring its books into the black. These chances are slim. But they’re clearly disclosed.
- deogeo 7y ago
  > Lots of businesses, particularly real estate businesses, feature self-dealing and family control galore. American corporate law goes out of its way to avoid criminalising stupidity. Self-dealing, as in how the founder leases his building to his firm, or how he owned and sold the We trademark to his own firm? I wouldn't call that 'stupidity'. In fact, it sounds very smart, for the founder. And unethical bordering on criminal.
  - blankcheque 7y ago
    I've heard it's not uncommon to separate low-multiple assets and high-multiple assets into different structures. In this case, the builds are the low-multiple assets and they're being separated out from the high-multiple asset which is the management company.
    - taurath 7y ago
      Imagine a huge conglomerate who has the ability to take revenues in more than one division - you claim the revenues in whatever the market treats as having a higher multiple, thus inflating your “growth” story and your stock price. To financial folks it looks like you’re shedding old businesses and making a new hit, but in reality it’s a finance trick.
    - csande17 7y ago
baby 7y ago
I'm genuinely curious, mind you I haven't read much about Wework. So, I can understand how a company like Theranos is fraud, because they are lying and have no product. But, I've used wework successfully, I know a lot of people using wework successfully. They have a product that works and that people pay for. How can such a company be a fraud?
- JumpCrisscross 7y ago
  > They have a product. How can such a company be a fraud? Fraud, put simply, is lying with material consequences. If Apple said their iPhone can fly you to the moon, and you bought it on that basis, you were defrauded. That the product does a bunch of other useful things is irrelevant. That said, I agree with you in us having insufficient evidence to label WeWork a fraud. They’re aggressively disclosing their weaknesses. No evidence of deception. Disclaimer: I am not a lawyer. This is not legal advice. Don’t toe the line with fraud.
  - baby 7y ago
    that seems more like an exaggeration than a fraud if the product does work for the most part no?
    - JumpCrisscross 7y ago
      > that seems more like an exaggeration than a fraud if the product does work for the most part no? If you bought it to go to the moon, it doesn’t work as promised. If the lie was wilful, that’s honest-services fraud. Less facetious of an example: you sell a company that makes lots of money but has a material liability on its books. The liability can’t kill the company. But you intentionally hid it from a buyer. The company still generates all those dollars. But your hiding this material fact from the purchaser is fraudulent. Disclaimer: I am not a lawyer. None of this is legal advice.
      - NewsAware 7y ago
        It's not about the Wework product "office space" being fraud, but about the product "wework shares" being sold as a good investment which is questionable
avip 7y ago
It seems irresponsible to use the term fraud. You need strong evidence to accuse someone in a criminal offence. Fraud is Theranos. We seems more of a BetterPlace - delusional, charismatic founder + too much money - sound business model.
- georgeecollins 7y ago
  You can never be sure that it is a fraud until someone is convicted. Convincing the company that you are the CEO of to pay you personally $5.9 million dollars for the trademark "We" (after you started the company and called it WeWork btw.) could be considered defrauding investors if the trademark "We" was not really worth $5.9m. It's not fraud until someone wins in court. And not all cases of fraud are pursued.
gumby 7y ago
Because it's so obviously a fraud that to say so doesn't add anything to the conversation. On the other hand the fraud is wrapped in the most delicious of absurd flfftery that it's a pleasure to try to ape it.
lancesells 7y ago
I'm not sure there's fraud here. It's more akin to voting for Trump to "Make America Great". It's purely a pr / sales-pitch and if people decide to invest they may lose their money or they may not. If I believe the S-1 it pretty clearly lays out the shadiness and ridiculousness of the company without being fraudulent.

by mola 7y ago

logicallee 7y ago

>it should be explained with facts, and clear simple language. since it looks like you've spent some time on this, would you care to take a shot?

mola 7y ago
What makes you think I understand this? my comment originated from the opaque language which read more like works of satire than actual analysis. All I can tell is that the whole way this company and its investors are acting is bat shit crazy. I'd like to get better analysis that is less "entertainment" and more factual and analytical.
- ramraj07 7y ago
  It's actually just satire with numbers. Which seems better than satire by itself by a mile, and (personally) also better than rote numbers listed because it's amusing. Why complain?
- logicallee 7y ago
  >What makes you think I understand this? The fact that you stated "The company is a fraud", before saying that this should be stated plainly. Since you didn't say something like "...from my point of view I certainly have the impression that..." or something like that. Since you spoke definitively, I assumed you have a definite opinion you formed somehow.

simplecomplex 7y ago

How is it fraud? Investors make idiotic investments. Nobody is being forced to buy shares of WeWork, and all the financials are there. It’s not like WeWork is lying about financials.

doctorpangloss 7y ago
My assumption is these investors know what they’re doing. So they’ve structured things to sell a bag to the public, arbitraging the difference between reality and regulatory requirements/what is documented generally. A conversation about fraud often litigates whether or not omission is a form of lying.
- simplecomplex 7y ago
  What did they omit that constitutes a lie in your opinion?
pixelpoet 7y ago
Consider the illegality of Ponzi scheme: nobody is forced to participate, investors make idiotic investments, and yet, because of the essentially certain loss of money, it can be regarded as knowingly defrauding the investor.
- simplecomplex 7y ago
  A Ponzi scheme lies about the source of returns. WeWork is not lying about any financials. WeWork is not a Ponzi scheme and you know it.

paultopia 7y ago

I know almost nothing about finance, and the only things I had to look up in the linked post were "EBITDA," "DJIA" (which turns out to just be an acronym for the Dow Jones) and "flywheel effect." Seems pretty plain to me.

baby 7y ago
Because I'm a huge noob too I googled these terms: * EBITDA or Earnings Before Interest, Tax, Depreciation and Amortization. It's pretty much the net (before-tax) income of the company (per year), but after expenses that are easy to calculate (like employees' salaries and rent). * DJIA or Dow Jones Industrial Average. It seems to be an index of the stock market, meaning a number calculated from the price of a selected number of stocks (in practice, 30 large US companies). * The Flywheel Effect. I guess to understand this one you need to understand what a flywheel is, it seems to be a pretty heavy wheel. The metaphor here is that building a successful company is like pushing a massive wheel for a very long time until it catches some momentum and roll by itself?
- deleted 7y ago
  [deleted]
- agrover 7y ago
  And that can be used to spin up secondary revenue streams more easily than starting from scratch.
- unreal37 7y ago
  It's worth noting that the DJIA comment was specifically mentioned because it contains only 30 companies and a terrible indicator of the overall health of all American companies. But it's used as the primary indicator of the health of American companies in nightly news reports. "Similar to the DJIA, last-round private valuations are harmful metrics that create the illusion of prosperity." A lot of people just wish the DJIA 30 would disappear from popular use. It's a harmful metric that gives the illusion of prosperity.
  - 7y ago

endorphone 7y ago

A lot of the behaviors of the founder seem outrageously fishy, however they are legitimately filling a rapidly growing need. At this very moment I have the WeWork Toronto locations page open as I contemplate biting the bullet on a private office there just to get out of the home office occasionally.

jngreenlee 7y ago
Be sure to cost/feature compare too! https://www.regus.ca/office-space/canada/ontario/toronto https://www.regus.ca/office-space/canada/ontario/toronto
- chx 7y ago
  Frankly, this is what I don't understand in this whole charade. IWG has a decent 2.5 billion yearly revenue and wringes a paltry 0.1B net income out of it. I mean, good for you, employing near 10 000 people and still being profitable but still, a 4% profit margin. That's razor thin and it's not immediately visible what WE is going to do so much better -- or better at all.
yao420 7y ago
There are dozens of non-WeWork coworking spaces across Toronto.
- endorphone 7y ago
  For sure, though the common model seems to be going in a class B building on a highway somewhere on the periphery and setting up an incredibly drab, soul crushing office. I've worked for Bell and RBC -- I've already done the soul crushing office thing. I have absolutely no doubt that I've missed some good ones, but that's how WeWork made me interested in something that I'd put off for so long -- really nice looking interiors in great parts of town/great buildings. They are in no way a tech company, however their aesthetic and values do more closely mirror tech companies than a lot of their competitors that are low cost satellite office providers for low-tier organizations.

JumpCrisscross 7y ago

> The company is a fraud This is extreme. Adam’s self-dealing is abundantly disclosed. There is no evidence he is acting in bad faith. (Versus being deluded himself.) Lots of businesses leverage paper-thin margins. Lots of businesses borrow short and lend long. Lots of businesses, particularly real estate businesses, feature self-dealing and family control galore. American corporate law goes out of its way to avoid criminalising stupidity. There is a chance WeWork attains enterprise lock-in sufficient to let it weather a storm. There is a chance it expands cross-selling to bring its books into the black. These chances are slim. But they’re clearly disclosed.

deogeo 7y ago
> Lots of businesses, particularly real estate businesses, feature self-dealing and family control galore. American corporate law goes out of its way to avoid criminalising stupidity. Self-dealing, as in how the founder leases his building to his firm, or how he owned and sold the We trademark to his own firm? I wouldn't call that 'stupidity'. In fact, it sounds very smart, for the founder. And unethical bordering on criminal.
- blankcheque 7y ago
  I've heard it's not uncommon to separate low-multiple assets and high-multiple assets into different structures. In this case, the builds are the low-multiple assets and they're being separated out from the high-multiple asset which is the management company.
  - taurath 7y ago
    Imagine a huge conglomerate who has the ability to take revenues in more than one division - you claim the revenues in whatever the market treats as having a higher multiple, thus inflating your “growth” story and your stock price. To financial folks it looks like you’re shedding old businesses and making a new hit, but in reality it’s a finance trick.
  - csande17 7y ago

baby 7y ago

I'm genuinely curious, mind you I haven't read much about Wework. So, I can understand how a company like Theranos is fraud, because they are lying and have no product. But, I've used wework successfully, I know a lot of people using wework successfully. They have a product that works and that people pay for. How can such a company be a fraud?

JumpCrisscross 7y ago
> They have a product. How can such a company be a fraud? Fraud, put simply, is lying with material consequences. If Apple said their iPhone can fly you to the moon, and you bought it on that basis, you were defrauded. That the product does a bunch of other useful things is irrelevant. That said, I agree with you in us having insufficient evidence to label WeWork a fraud. They’re aggressively disclosing their weaknesses. No evidence of deception. Disclaimer: I am not a lawyer. This is not legal advice. Don’t toe the line with fraud.
- baby 7y ago
  that seems more like an exaggeration than a fraud if the product does work for the most part no?
  - JumpCrisscross 7y ago
    > that seems more like an exaggeration than a fraud if the product does work for the most part no? If you bought it to go to the moon, it doesn’t work as promised. If the lie was wilful, that’s honest-services fraud. Less facetious of an example: you sell a company that makes lots of money but has a material liability on its books. The liability can’t kill the company. But you intentionally hid it from a buyer. The company still generates all those dollars. But your hiding this material fact from the purchaser is fraudulent. Disclaimer: I am not a lawyer. None of this is legal advice.
    - NewsAware 7y ago
      It's not about the Wework product "office space" being fraud, but about the product "wework shares" being sold as a good investment which is questionable

avip 7y ago

It seems irresponsible to use the term fraud. You need strong evidence to accuse someone in a criminal offence. Fraud is Theranos. We seems more of a BetterPlace - delusional, charismatic founder + too much money - sound business model.

georgeecollins 7y ago
You can never be sure that it is a fraud until someone is convicted. Convincing the company that you are the CEO of to pay you personally $5.9 million dollars for the trademark "We" (after you started the company and called it WeWork btw.) could be considered defrauding investors if the trademark "We" was not really worth $5.9m. It's not fraud until someone wins in court. And not all cases of fraud are pursued.

gumby 7y ago

Because it's so obviously a fraud that to say so doesn't add anything to the conversation. On the other hand the fraud is wrapped in the most delicious of absurd flfftery that it's a pleasure to try to ape it.

lancesells 7y ago

I'm not sure there's fraud here. It's more akin to voting for Trump to "Make America Great". It's purely a pr / sales-pitch and if people decide to invest they may lose their money or they may not. If I believe the S-1 it pretty clearly lays out the shadiness and ridiculousness of the company without being fraudulent.