4 ms·
The bull case for WeWork is really well laid out here. And what it tells me is that a well-run company competing with WeWork would (or will) destroy them. Imag
by mabbo 7y ago
The bull case for WeWork is really well laid out here. And what it tells me is that a well-run company competing with WeWork would (or will) destroy them.
Imagine a WeWork competitor that launches in a few years, at the bottom of the coming recession, that isn't doing sketchy financial things to make their founder wealthy. They could match or undercut WeWork's prices at a time when WeWork will probably be barely alive (if they make it that long) and still make money.
"AWS for Offices" is a great story, but it forgets that AWS has some serious competition now. Hardware as a service stopped being a disruption and became the norm with a competitive market. So too will "offices as a service" if WeWork's model is correct.
- streetcat1 7y agoI am not for or against wework. However, they do have first mover advantage for prime locations. I.e. it is not just cheaper rents. Also, the founder dealing is not that relevant to the future of the company. Yes, he is a public persona, but for the day to day operations, I believe that there are operational personal that make the decisions.
- southerndrift 7y agoWhat if WeWork is a bet on a future where no recession is going to happen? If the zero-interest money policy continues, then the amount of money increases and prices will slightly go up. No competitor can get the low rents that WeWork has secured.
- human20190310 7y agoIf the thesis is that no recession will happen, and that money is free, why not just borrow money and dump it into an S&P 500 index fund and skip all the actual work?
- southerndrift 7y agoGuess what buybacks are! The problems for anybody else are diminished returns and the limited amount of banks that are willing to give you money for nothing.
- mdorazio 7y agoTo be clear, the WeWork model is not new. Flexible office space in multiple locations has been a thing for decades from companies like Regis. I've used several of them without issue since before WeWork was even announced. What WeWork did was make it cool/startup-friendly and market the hell out of it while charging a premium that companies flush with investor cash can afford to pay out.