6 ms·

It's weird how the people who are best-informed here seem to be the latest to the party as far as that realisation goes. Why did they (by that I mean, We), even

by s_Hogg 7y ago

It's weird how the people who are best-informed here seem to be the latest to the party as far as that realisation goes. Why did they (by that I mean, We), even decide to kick the whole IPO process off? Surely they didn't need to do this now?

maxerickson 7y ago
They didn't anticipate the meddling kids. What I mean is, they thought they were going to get away with it.
- cosmie 7y ago
  > They didn't anticipate the meddling kids. Nor their dumb dog![1] [1] The parent reference is to the catch line in Scooby Doo, for those that aren't familiar. And quite well fitting to the situation. https://youtu.be/mbXxgQLlF08 https://youtu.be/mbXxgQLlF08
  - deleted 7y ago
    [deleted]
  - Bizarro 7y ago
    Scrappy was the biggest meddler...always mucking up the works.
- hn_throwaway_99 7y ago
  Yup, which to an outside observer is pretty shocking, given how grossly deficient the S1 is. Another commenter in a different thread posted this informative Jason Calacanis podcast about WeWork: https://thisweekinstartups.com/e969 https://thisweekinstartups.com/e969 One part that really resonated is when Calacanis is arguing that, once you become super rich, you need to rely on your authentic, pre-rich friends to give you candid advice (because after you become super rich, you can't really trust new friends when so many folks want a piece of your wealth). Calacanis' idea, which makes sense to me, is that Neumann didn't have a strong enough social base, so that he didn't have anyone candidly telling him stuff like "Umm, you know, this We trademark licensing deal is completely batshit insane and analysts will see this as a giant, bedazzled red flag" before he went ahead and did it. Insightfully, Calacanis predicted Neumann would walk back the licensing deal, and actually talks about Masayoshi Son being one of the only people that can give Neumann the harsh dose of reality he needs. I think this is all kind of a moot point, though. It's like WeWork jumped out of an airplane without a parachute and is now going "How do we fix this??" I'd put money down on some form of either (a) a restructuring or (b) essentially being taken over by the major lenders/investors as inevitable.
  - Danieru 7y ago
    Softbank cannot let either scenario S or B happen. Masatoshi-san needs the plates to stay in the air for his second fund to come together. He is a man who doubles down until broke. It is both what has made him so successful, and also why I do not buy softbank stock.
tyre 7y ago
I'm not sure what you mean by late to the party. They were the first ones at this party. WeWork has grown through the charisma of its CEO. Based on past performance, it has worked every time. They're on the extreme end of "startup realizes public markets will call them on their shit" but you can see why they'd be confident they could pull it off.
- ineedasername 7y ago
  > "they're on the extreme end of..." Yes, and it caught up to them just a bit too soon for the IPO. Had the CEO been a little less brazen in his self-dealing, they might have pulled it off with more success.
ineedasername 7y ago
I think losing $1.9 billion on $1.8 billion in revenue in 2018 (yes, I know it's more complicated than that) has made getting additional capital more difficult. At the same time a self-dealing CEO gives the appearance to investors that he might not be confident that his normal compensation/stock will be worth that much, hence the extraction of value in other ways, leading to concerns about corporate governance that makes private capital more reluctant still. So the IPO is necessary to raise capital, not just to give early investors a soft exit. Now its catching up to them a bit too soon for a maximal IPO, so they're rethinking and perhaps a bit desperately (my interpretation only) going back for more private money.
deleted 7y ago
[deleted]

by s_Hogg 7y ago

maxerickson 7y ago

They didn't anticipate the meddling kids. What I mean is, they thought they were going to get away with it.

cosmie 7y ago
> They didn't anticipate the meddling kids. Nor their dumb dog![1] [1] The parent reference is to the catch line in Scooby Doo, for those that aren't familiar. And quite well fitting to the situation. https://youtu.be/mbXxgQLlF08 https://youtu.be/mbXxgQLlF08
- deleted 7y ago
  [deleted]
- Bizarro 7y ago
  Scrappy was the biggest meddler...always mucking up the works.
hn_throwaway_99 7y ago
Yup, which to an outside observer is pretty shocking, given how grossly deficient the S1 is. Another commenter in a different thread posted this informative Jason Calacanis podcast about WeWork: https://thisweekinstartups.com/e969 https://thisweekinstartups.com/e969 One part that really resonated is when Calacanis is arguing that, once you become super rich, you need to rely on your authentic, pre-rich friends to give you candid advice (because after you become super rich, you can't really trust new friends when so many folks want a piece of your wealth). Calacanis' idea, which makes sense to me, is that Neumann didn't have a strong enough social base, so that he didn't have anyone candidly telling him stuff like "Umm, you know, this We trademark licensing deal is completely batshit insane and analysts will see this as a giant, bedazzled red flag" before he went ahead and did it. Insightfully, Calacanis predicted Neumann would walk back the licensing deal, and actually talks about Masayoshi Son being one of the only people that can give Neumann the harsh dose of reality he needs. I think this is all kind of a moot point, though. It's like WeWork jumped out of an airplane without a parachute and is now going "How do we fix this??" I'd put money down on some form of either (a) a restructuring or (b) essentially being taken over by the major lenders/investors as inevitable.
- Danieru 7y ago
  Softbank cannot let either scenario S or B happen. Masatoshi-san needs the plates to stay in the air for his second fund to come together. He is a man who doubles down until broke. It is both what has made him so successful, and also why I do not buy softbank stock.

tyre 7y ago

I'm not sure what you mean by late to the party. They were the first ones at this party. WeWork has grown through the charisma of its CEO. Based on past performance, it has worked every time. They're on the extreme end of "startup realizes public markets will call them on their shit" but you can see why they'd be confident they could pull it off.

ineedasername 7y ago
> "they're on the extreme end of..." Yes, and it caught up to them just a bit too soon for the IPO. Had the CEO been a little less brazen in his self-dealing, they might have pulled it off with more success.

ineedasername 7y ago

I think losing $1.9 billion on $1.8 billion in revenue in 2018 (yes, I know it's more complicated than that) has made getting additional capital more difficult. At the same time a self-dealing CEO gives the appearance to investors that he might not be confident that his normal compensation/stock will be worth that much, hence the extraction of value in other ways, leading to concerns about corporate governance that makes private capital more reluctant still. So the IPO is necessary to raise capital, not just to give early investors a soft exit. Now its catching up to them a bit too soon for a maximal IPO, so they're rethinking and perhaps a bit desperately (my interpretation only) going back for more private money.

deleted 7y ago

[deleted]