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Wow! How did they come up with this valuation? I assumed the bankers that were part of this deal would have based their valuation on something solid. But this

Wow! How did they come up with this valuation? I assumed the bankers that were part of this deal would have based their valuation on something solid. But this is an 80% discount in a span of 6 weeks. Something is seriously not right with this company. It seems like its build on a house of cards.

Ilverin 7y ago
Quote from Matt Levine: https://www.bloomberg.com/opinion/articles/2019-09-09/we-might-not-be-working https://www.bloomberg.com/opinion/articles/2019-09-09/we-mig... Well, I just got through saying that there’s not really any reward for being pessimistic and right about valuation when you are pitching an IPO. Your optimistic competitors will get the mandate, and then spend some time walking the company back ... On the other hand it is a repeat game and there are occasionally penalties for getting it wrong: ... it will be rough for Morgan Stanley if winning the biggest IPO prize [Uber] of the unicorn era loses it the biggest IPO prize of all time [Saudi Aramco]
- dehrmann 7y ago
  > Saudi Aramco Complete aside, but the ~second largest oil producing country is selling part of its state-owned oil company. Yes, they're trying to diversify so they're not just a petrostate, but this should be a red flag for the oil industry.
dawhizkid 7y ago
I wouldn’t look too deep into it. Private valuations are mostly meaningless. This goes for everyone.
linuxftw 7y ago
> But this is an 80% discount in a span of 6 weeks Discount is the word they want you to hear in your head. The valuations are all imaginary. By setting such a high previous valuation, people now look at the current valuation in the context of that, instead of what it should be: $0.
- lowdose 7y ago
  This, also called price anchoring. https://en.wikipedia.org/wiki/Anchoring https://en.wikipedia.org/wiki/Anchoring
paxys 7y ago
WeWork's valuation so far has been decided by a single company - Softbank. The $50 billion number was always pulled out of thin air, and they are now hitting reality.

Ilverin 7y ago

Quote from Matt Levine: https://www.bloomberg.com/opinion/articles/2019-09-09/we-might-not-be-working https://www.bloomberg.com/opinion/articles/2019-09-09/we-mig... Well, I just got through saying that there’s not really any reward for being pessimistic and right about valuation when you are pitching an IPO. Your optimistic competitors will get the mandate, and then spend some time walking the company back ... On the other hand it is a repeat game and there are occasionally penalties for getting it wrong: ... it will be rough for Morgan Stanley if winning the biggest IPO prize [Uber] of the unicorn era loses it the biggest IPO prize of all time [Saudi Aramco]

dehrmann 7y ago
> Saudi Aramco Complete aside, but the ~second largest oil producing country is selling part of its state-owned oil company. Yes, they're trying to diversify so they're not just a petrostate, but this should be a red flag for the oil industry.

dawhizkid 7y ago

I wouldn’t look too deep into it. Private valuations are mostly meaningless. This goes for everyone.

linuxftw 7y ago

> But this is an 80% discount in a span of 6 weeks Discount is the word they want you to hear in your head. The valuations are all imaginary. By setting such a high previous valuation, people now look at the current valuation in the context of that, instead of what it should be: $0.

lowdose 7y ago
This, also called price anchoring. https://en.wikipedia.org/wiki/Anchoring https://en.wikipedia.org/wiki/Anchoring

paxys 7y ago

WeWork's valuation so far has been decided by a single company - Softbank. The $50 billion number was always pulled out of thin air, and they are now hitting reality.