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WeWork’s Adam Neumann Steps Down as CEO

728 points by mudil 7y ago

alephnan 7y ago
Given a choice, would founder/CEOs with big personalities prefer being powerful or rich?
- austenallred 7y ago
  rich, but they're the same thing
- OatMilkLatte 7y ago
  Given that you can't really have power without being rich, I question the assertion that this is a choice :)
  - brianwawok 7y ago
    Many previous presidents of the US were "very well off" but not Rich in the warren buffet sense (Obama comes to mind). Possibly the most powerful position in the world. Many generals of the US army are not "rich". I suspect there are some cabinet positions that don't pay a lot, but offer a lot of power...
    - jriot 7y ago
      Ulysses S Grant comes to mind.
- deleted 7y ago
  [deleted]
hendzen 7y ago
I guess he has more time now to focus on his campaign for president of the world.
- dang 7y ago
  Maybe so, but please don't post unsubstantive comments here.
rahkiin 7y ago
And what about the buildings he leases to We? Or what about his wife?
- onlyrealcuzzo 7y ago
  I'm interested about the buildings. A lot of people bullish on WeWork say -- "Oh, they'll just walk away from the leases. Each lease is owned by a different subsidiary. That subsidiary will just file bankruptcy. Problem solved. They'll just cut the losers, and turn up the dial on the profitable buildings." Adam got a $750M loan from WeWork, right? I'm assuming he used that loan to secure more loans to buy the buildings he then rents back to WeWork (at a profit). I wonder what happens to him if WeWork walks away from his buildings. I doubt he has the cash to hold onto those buildings for more than a few months without a client -- especially if WeWork is still private. If they go public before they "walk away" from his buildings, he'll have to sell massive amounts of stock to cover his losses. Unless we get to negative interest rates, I don't see a future that looks good for WeWork.
  - somebodythere 7y ago
    How do the negative rates benefit WeWork?
    - WJW 7y ago
      Because they are net borrowers and lower interest rates mean they have to pay less interest.
  - kerkeslager 7y ago
    > "Oh, they'll just walk away from the leases. Each lease is owned by a different subsidiary. That subsidiary will just file bankruptcy. Problem solved. They'll just cut the losers, and turn up the dial on the profitable buildings." Ugh. What an awful culture we live in where this is considered perfectly normal behavior.
    - woah 7y ago
okhumans 7y ago
OK faith in humanity restored. Glad the "we'll we didn't hide any of the adam neumann transgressions from you! Look at the s-1!" didn't work out..
buboard 7y ago
Doesn't that ... devalue the company? they re now a real estate company without a spiritual leader
- rtkwe 7y ago
  They were always a real estate company, they just didn't get to IPO under the SV hype because as it got closer people looked closer at the company and realized the valuation was ridiculous and the CEO was lining his own pockets acting as landlord to his own company. Now that that's happened and it's all come out he has to step down.
  - buboard 7y ago
    the way you described it, it's like a cult lost its leader
    - celticninja 7y ago
      Cult of personality
    - rtkwe 7y ago
      Yeah somewhat. Though instead of it's leader it lost it's appeal and the cult leader had to go into hiding. WeWork is still a decent business idea just no where near the crazy valuations it was given.
      - hilbertseries 7y ago
        Given how much money wework has lost this year, I think it remains to be seen if they’re a decent business.
        rtkwe 7y ago
        I mean more the underlying model seems like it should work. There's tons of successful coworking spaces it seems and that's a lot of what WeWork did just with the option for company size teams.
Jaygles 7y ago
You've got to wonder what kind of a person is it that can get so far in building a successful behemoth like this but at the same time is able to seriously put forward ideas like becoming President of the world or asking management to cut 20% of the workforce yearly
- strikelaserclaw 7y ago
  Someone with unbridled belief in themselves.
  - ngngngng 7y ago
    I lean towards this being ignorant hubris. I don't think he set out to scam investors.
    - jonknee 7y ago
      It's not ignorance to sell your company its trademark or to buy a building with a loan backed by company stock and then have the company lease it from you at a tidy profit.
    - michaelt 7y ago
      I don't think he set out to scam investors. I tripped, fell, and when I put my hand out to catch myself I accidentally had the company give me a loan to buy a building that I leased back to them.
      - okhumans 7y ago
        LOL +1
    - anigbrowl 7y ago
      Let me give you an insight into the thought process here: 'It's not unethical if I don't feel bad about it.' The key to operating this way to is cultivate a sense of belief in your own BS - inspire others by having the 'vision thing', saying 'I wish you could see what I can see' etc. Ignore anything negative and devote as little thought to it as possible because what people are buying into is your sunny disposition - they don't really want to analyze your stuff, they want to feel the way you look: radiantly confident. So you just think happy thoughts and if anyone asks you troubling questions re-articulate your vision of heaven/ profits/ national pride/ whatever and make a performance of being nurtured by that beautiful vision alone, before mentioning that anyone can share it for 3 easy payments of $____.
conroy 7y ago
From "We Wants a New Boss"[0], written yesterday in Money Stuff: > ...it’s terrible for SoftBank! The message from SoftBank is pretty much “your [Neumann's] job was to extract billions of dollars out of us, and you succeeded at it admirably; now that you’ve served that purpose, we should replace you with a real-estate CEO to salvage the value of your investment and ours.” [0] https://www.bloomberg.com/opinion/articles/2019-09-23/we-wants-a-new-boss https://www.bloomberg.com/opinion/articles/2019-09-23/we-wan...
- rwmurrayVT 7y ago
  There was another good segment on it today. From "WeKeepGoingWithThisHuh"[0] >...Or I guess maybe the IPO bankers leaked it because they want Neumann gone, to make the IPO easier, and want to commit Son to it by leaking. Or because they love messy drama maybe? It’s not their company. The even funnier part of the segment is when he gets into what some of the banks actually put out as a reasonable IPO valuation. >...JPMorgan told WeWork executives the company could be worth between $46bn and $63bn in the listing. Goldman pegged the equity at between $61bn and $96bn. Morgan Stanley estimated WeWork’s valuation at between $43bn and $104bn in a presentation in 2018, though a pitch for the IPO set it at a more modest $18bn-$52bn. [0]https://www.bloomberg.com/opinion/articles/2019-09-24/don-t-steal-the-payrolls https://www.bloomberg.com/opinion/articles/2019-09-24/don-t-...
  - human20190310 7y ago
    At what point do these deranged estimates start damaging the credibility of the estimators?
    - bduerst 7y ago
      Probably when making bad over estimations starts costing them.
    - rwmurrayVT 7y ago
      It would seem like never. Matt Levine had another interesting take on that as well. [0] >... 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] [0]https://www.bloomberg.com/opinion/articles/2019-09-09/we-mig.. https://www.bloomberg.com/opinion/articles/2019-09-09/we-mig....
whoisjuan 7y ago
This is some dense shit. I can't imagine how working for WeWork feels like, right now. I have worked for companies where all the employees were eagerly waiting for the day the company will go public. It was seen as a pivotal moment both financially and professionally. In any rational world that's a landmark moment. A significant milestone for founders, investors and early employees. For WeWork it has been the complete opposite. They filed to go public and everything is going south since then. Must be surreal that what seemed to be the start of a bright future may be very well the start of a dark end.
- rwmurrayVT 7y ago
  I imagine it feels like you just lost 50%+ of your net worth. If there's no liquidity then you never know when you could get screwed!
Ericson2314 7y ago
What pressure is this with the crazy different classes of stocks?
ngngngng 7y ago
I'm so glad I read hacker news. I almost took a job at WeWork just 2 months ago with a recruiter working very hard to convince me I'd be rich when they IPO. Now I'm at a much smaller startup called Weave which is a really phenomenal place to work. I didn't discover until recently that it's also a YCombinator company. edit: to clarify, hacker news has been extremely skeptical of WeWork for some time, due to this, I was extremely wary of their offer and leaned towards (and eventually chose) other options.
- nickstinemates 7y ago
  Good people at Weave, awesome it's working out!
- deleted 7y ago
  [deleted]
- alasdair_ 7y ago
  I also dodged this bullet two months ago. They were hiring like crazy in Seattle. Thanks HN!
  - mcny 7y ago
    Insane. This story is number one on hn for me and right below it in number two is https://news.ycombinator.com/item?id=21062231 https://news.ycombinator.com/item?id=21062231 > WeWork, Bankers Have Discussed Laying Off One-Third of Workforce (theinformation.com) If you, the reader, have an offer from WeWork, I suggest you ask for a bigger paycheck (like real money, not funny money) for all this uncertainty.
    - moltensodium 7y ago
      At this point there is a non-zero and growing chance the company collapses completely. They have no plans or research or any other projects that are expected to make money, ever, and nobody seems interested in another round of fundraising. They will likely try to force the IPO through anyway at some sub $5B valuation, but even then it seems like they may not generate much interest after that cuckooville S1.
DebtDeflation 7y ago
I'm guessing the "Non-Executive Chairman" position will just be a temporary one until they can come to agreement on how much money they need to pay him to go away. Professor Galloway called this the other day. His next prediction is that We will sell off all the bullshit vanity projects like WeLive and WeGrow along with the other nonsense Adam bought (like the wave pool company so he can practice surfing at work). Then they will fire all non-core employees. The clock is ticking if they want to save this company.
- chrshawkes 7y ago
  Is this true or an exaggeration? I couldn't find anything on it.
  - DebtDeflation 7y ago
    https://www.profgalloway.com/wewtf-part-deux https://www.profgalloway.com/wewtf-part-deux It was published on Friday and so far he is knocking it out of the park with these predictions.
- paggle 7y ago
  I don't think they will shut down WeLive. The entire premise of WeWork, and WeLive, is that they can sell you more than real estate -- they can sell you a "tribe." There are so many reports in recent years about growing social isolation and loneliness, that if something can be successfully packaged into a simulacrum of a community, it will be a hot item indeed. That's the only way WeWork can justify its stratospheric investments, and it is the market they will aim to dominate.
  - DebtDeflation 7y ago
    I'm sorry, but while there is some logic to the co-working idea, I don't see any serious demand for co-living. Quite frankly, I find the idea of having on-premise yoga instruction, cafes, bars, shared hot tubs, shared kitchens, etc. so you never have to leave your apartment building (except, presumably, to go to WeWork) to be absurd.
duxup 7y ago
Does it change the financials, not sure what this does for them?
- formercoder 7y ago
  Corporate governance is just as important as financials. There is no point investing in something that is out of control.
jamestimmins 7y ago
I get the impression that SoftBank learned the wrong lesson from Uber. While Uber also raised billions of dollars and had a CEO get forced out by investors, it was broadly understood that his sin was creating a toxic/sexist culture. It wasn't related to business fundamentals, per se. WeWork's sins were less of rampant sexism, and more closely related to an unreasonable valuation and a business that wasn't prepared for the current IPO climate. In other words, they were things for which the investors are also culpable. I'm not a founder, but I'd be very hesitant to raise from SoftBank if I was (and very nervous if I had already raised from them). With Benchmark (and Uber's other investors), I'd only be worried if the toxic culture I created was putting their investment seriously at risk.
- dbuder 7y ago
  Don't be in awe of any VC or banker and hire your own lawyer.
- dehrmann 7y ago
  > it was broadly understood that his sin was creating a toxic/sexist culture Excluding the sexism, the toxic parts go hand-in-hand with the mindset Uber needed to ignore incumbents and regulations. The only reason Uber was successful was because of that attitude. Where it failed was growing up.
  - mason55 7y ago
    > The only reason Uber was successful was because of that attitude. Where it failed was growing up. Which, by the way, is not a weird thing. Different stages of a company lifecycle require different types of leadership.
- hobofan 7y ago
  > it was broadly understood that his sin was creating a toxic/sexist culture. It wasn't related to business fundamentals, per se. So it had nothing to do with: - General disregard for regulation - Blocking regulators from the plaform via Greyball - Corporate espionage - Waymo vs. Uber From my impression at the time he was forced out primarily because of actions like those last two (only few of many), because they have the potential to cost Uber serious money (sexism sadly not so much).
arkj 7y ago
Comedy!!!
- sg47 7y ago
  Company - WeBroke Investors - WeWoke Employees - WeQuit
- dang 7y ago
  Please don't post unsubstantive comments here.
john_moscow 7y ago
Well, corporate governance was one of the main factors why the market refused to accept anything close to their last private valuation, so this makes sense. Note that they desperately need the public money before the end of December in order to avoid running out of cash [0]. My bet is that they will now try to remarket We as a shareholder-controlled company, will maybe even eliminate the multi-class stock structure in order to get included into the passive funds. I am still not sure they will ever become profitable through. The only way to disrupt the incumbents in an established market like this one would be to spot a new opportunity in the market and capitalize on it faster than the slow 30-year-old companies like Regus. Except the only market opportunity We has successfully exploited by now are the desperate investors ready to shove billions in your hands if you pretend to be a cool techy thing they don't fully understand. [0] https://www.reuters.com/article/wework-loan/clock-ticking-down-on-weworks-us6bn-loan-after-ipo-delayed-idUSL2N26A0VF https://www.reuters.com/article/wework-loan/clock-ticking-do...
- rwmurrayVT 7y ago
  I just don't see them wrestling control away from the deranged, cult leader. He truly believes he is destined to be president of the world and revolutionize.. well every thing. There best bet would be to drop the multi-class structure to get into passive funds. It needs $8.1b market cap to get into S&P500.
  - 0xB31B1B 7y ago
    It also needs to be ebita profitable for 8 quarters in a row before its added to the index IIRC
    - rwmurrayVT 7y ago
      I think it's most recent quarter + 4 previous. I'm also fairly certain it's selected by committee. I'm no finance expert, hence the securities fraud conviction. I don't really know which index it could get into with a high amount of passive investment.
  - YPCrumble 7y ago
whoisjuan 7y ago
This is some dense shit. I can't imagine how working for WeWork feels like, right now. I have worked for companies where all the employees were eagerly waiting for the day the company will go public. It was seen as a pivotal moment both financially and professionally. In any rational world that's a landmark moment. A significant milestone for founders, investors and early employees. For WeWork it has been the complete opposite. They filed to go public and everything is going south since then. Must be surreal that what seemed to be the start of a bright future may be very well the start of a dark end.
- jonknee 7y ago
  WeWork has been an obvious fuckup to even casual observers for years, if people inside the company couldn't see this I really don't know what to say.
  - brianpgordon 7y ago
    All the more reason for employees to be excited about the opportunity to finally see liquidity for their shares.
    - jonknee 7y ago
      Well my point is it should have been obvious the shares were absolutely worthless.
    - ghaff 7y ago
      A lot of people convinced themselves that if they could just make it to the IPO at least they’d have a lucrative way off the shipwreck. Oops.
  - pat87 7y ago
    It’s hard to see things when your salary depends on you not seeing said things.
  - ImprovedSilence 7y ago
    I can see how their leadership is a bit bush league and they are potentially overvalued, but it’s not obvious to me that their basic value proposition sucks or is that far off the mark.
mharroun 7y ago
Wow does a day not go by that we get new news of wework falling apart?
- brink 7y ago
  WeWork is an easy target. It's like no matter what they do, they're getting shot at.
  - short_sells_poo 7y ago
    Let's be honest, in your analogy, WeWork painted a giant target on their own back, put on a shit eating grin, raised a placard saying "I crapped on your lawn and fondled your wife" and started parading through the target end of the All National Homecoming Machinegun and Automatic Weapons Competition range, all the while their CEO handed out 1000 round ammo cans at the entry. To say that "they were asking for it" would be a huge understatement. The night shift janitor of the building two blocks down from their offices would have called this.
rconti 7y ago
The latest Slate Money podcast had a great segment savaging Neumann. https://slate.com/podcasts/slate-money/2019/09/slate-money-on-uber-and-wework https://slate.com/podcasts/slate-money/2019/09/slate-money-o...
- ryanwaggoner 7y ago
  Their criticism of just about anything rings hollow since two of the hosts basically hate just about everything associated with money and capitalism, despite their staggering ignorance of many corners of it. Their guests and Anna Szymanski are the only non-embarrassing parts of the show for me, but I still eventually just gave up and stopped listening.
  - eclecticsceptic 7y ago
    I think you've got that backwards. Anna is an unabashed capitalist who refuses to criticise even the shadiest goings-on in finance, start-ups etc. Felix and Emily seem to have a good nose for nonsense, like wework.
    - rconti 7y ago
      Well, it looks like we've covered both sides of the arguments :) I guess my take is somewhere between these two comments. I sometimes hate the way it feels like Anna plays a "contrarian character" no matter what, and yes, Felix and Emily can sometimes be a bit too.. "NPR do-gooder, feel-gooder" for my taste. But I really enjoy the show regardless. It's a saturday morning long-run staple for me.
dbancajas 7y ago
what does 'pressure' actually mean? How is it exerted by outside investors?
jiveturkey 7y ago
wow! that was quick. surprising to say the least. these kind of people tend to be driven by ego, so this must have hurt. looks like he'll still be chairman though.
- easytiger 7y ago
  My assumption has been he will step aside, wait for an inevitable restructuring post IPO markdown (and blame the markdown on his being pushed out) then swoop in and take the credit for getting it back on track
cgearhart 7y ago
I had concerns earlier this year when I interviewed at WeWork—which was the worst interview experience I’ve ever had. I applied for a data science role. The first two hours of the on-site were painful—they seemed to be asking questions tailored to be outside my experience. The third interviewer came into the room and said, “I, uh, just looked at your resume and I have to ask, why do you want to be a backend engineer?” :facepalm: I showed him my application for a DS role, so he left and came back with a DS guy who made up an interview on the spot. I (fortunately?) didn’t get a call back.
- metalliqaz 7y ago
  WeWork is basically a real estate company. Why would they need a data science engineer?
  - LargeWu 7y ago
    Because they are cosplaying as a tech company.
    - metalliqaz 7y ago
      I guess that's how you get those SoftBank billions.
      - hef19898 7y ago
        Only thing missing is a plan to get as much of these billions out of the company into your own pocket then, I guess. Not that stupid from a purely self-serving perspective. Ignores every aspect of corporate governance and business ethics, so. Not that SoftBank seems to care if they can get an IPO.
    - Wellrowed 7y ago
      The email I received after applying for a job many months ago: “Thanks so much for taking the time and interest in applying to WeWork Global Technology. Your application has been received and we will review it as soon as possible. Once we've had a chance to review we'll be in touch on possible next steps, thanks again for the time! Regards, WeWork Global Technology”
jiveturkey 7y ago
> recruiter working very hard to convince me I'd be rich when they IPO recruiters still do that? so unethical.
- nickstinemates 7y ago
  bad ones do. they'll be selected out of the industry over time.
  - kamarg 7y ago
    Unfortunately there's always new recruiters that are willing to press this point either because they believe it or they just want the commission and will say what it takes to place a candidate. This is not something that will be fixed just by having the "bad" recruiters slowly removed over time. It's a constant task to educate job seekers that such an event is very unlikely.
  - OatMilkLatte 7y ago
    The problem is, they aren't being selected out of the industry...they're becoming the industry.
  - rongenre 7y ago
    There's almost no barrier to entry to become a recruiter.
  - compiler-guy 7y ago
    Recruiters get paid by the companies seeking employees. If these tactics do indeed provide employees, then the company pays them and they stay in the business. Recruiters are selected for recruiting talent. As long as the talent stays for some length of time that the recruiter isn't blamed for poor retention, then the recruiter wins. This time is months, not years. That's why recruiters who work these angles still exist. It's not like this is a new phenomenon. It has been going on as long as there have been tech-recruiters. If they did get selected out, they would all be gone already.
- tudelo 7y ago
rcardo11 7y ago
Sorry for my ignorance on this, but recently I find that top hacker news articles need a paid subscription. Do you have a trick for accessing them or just everyone here has a paid subscription?
- redisman 7y ago
  I guess people just read the headline. AFAIK Incognito tricks don't work anymore so I also can't read these articles at all.
  - mcphilip 7y ago
    Anecdotally, on both mobile and desktop I’m able to hit the X button on Chrome after the content loads but before the paywall shows and read the entire article.
- istjohn 7y ago
  Try archive.is
- x13 7y ago
  https://github.com/iamadamdev https://github.com/iamadamdev may help
- deckar01 7y ago
  console.log(document.querySelector('.meteredContent').innerText.replace(/(.{80}\w*)\s*/g, '$1\n'))
- eggsthedev 7y ago
  I use uBlock Origin, I don't know if it helps block the subscription popup but I can read it properly in Firefox.
- Traster 7y ago
  On NYT in particular, load the page, when the text loads hit escape and the subscription nag simply doesn't load. It's not particularly ethical, but on the other hand maybe NYT should get serious about the software that's meant to protect its business model.
WhompingWindows 7y ago
WeWork's business model is convincing investors they are a tech company with a dozens-of-billions valuation. I am glad HN, amongst others, have torn down this real-estate company wearing a tech-unicorn-mask.
- rolltiide 7y ago
  > WeWork's business model is convincing investors they are a tech company with a dozens-of-billions valuation That's their recruiting model too. These cults have people married to them their whole career and don't even know they are a laughing stock. They have conversations with their friends like "well joining a tech company has been very different from my old cubicle farm!"
- buboard 7y ago
  Ironically, the company is in the front page of HN for two days. If Tech really didnt care (they do - they ve invested in it) they wouldn't give a toss about a RE company.
perseusprime11 7y ago
It still does not make it a tech company and does not justify the valuation. The business at the very core is not healthy and needs cash to even survive. Institutional investors will not take the bait with no upside.
jchallis 7y ago
WeWork's Bond Prices are falling rapidly.These are the only financial instruments that measure market appetite. Someone thinks they might not be paying back the money they are borrowing. https://www.reuters.com/article/us-wework-ipo-debt/wework-bond-prices-falls-after-softbank-questions-ceo-marketaxess-idUSKBN1W81J0 https://www.reuters.com/article/us-wework-ipo-debt/wework-bo...
- freddie_mercury 7y ago
  You added the editorial "rapidly", which doesn't appear anywhere in the article linked because the fall isn't rapid. It fell 1.1%, which is not rapid, especially for something that was already rated a junk bond. And without any data on the bond's previous price volatility it isn't impossible to say whether 1.1% is worse than it had, say, the week before.
nytesky 7y ago
I assume he still retains the gobs or cash extracted through all his shenanigans and controlling shares? And thus could reinstate himself after IPO?
- knd775 7y ago
  They loaned him a lot of the money that he used to buy the properties. It remains to be seen how the loans are structured, but it's possible that the company can call in their loans and put him in a position that he needs to sell properties.
  - anaphor 7y ago
    Wouldn't he still be making money on the sale, unless the loans gain the same amount of interest as the amount the properties have appreciated by?
DebtDeflation 7y ago
CNBC reporting his Class B and C shares will be further reduced from 10:1 to 3:1 voting rights, so he no longer will control the majority of votes. https://www.cnbc.com/2019/09/24/wework-ceo-adam-neumann-is-expected-to-step-down-amid-controversy-and-retain-chair-role-wsj-reports.html https://www.cnbc.com/2019/09/24/wework-ceo-adam-neumann-is-e...
- 609venezia 7y ago
  Wow. That's a surprise. I wonder what kind of stick they had to beat him into that?
  - DebtDeflation 7y ago
    Softbank probably made it clear to him that if there is any hope to salvage the IPO and have a chance at a lucrative exit, this is the only path forward. That or they found his cereal box and threatened to call the cops.
    - gberger 7y ago
      > That or they found his cereal box and threatened to call the cops. I'm sorry, I don't understand this part. Is this a reference to something?
      - kgwgk 7y ago
        Google “cereal box wework” and you’ll find a drug-related story in the WSJ.
  - rocqua 7y ago
    I think Softbank could tank We stock by refusing to further finance them, and trying to sell them. That would also hurt Softbank though, so the question becomes, what was so bad about Neumann staying on to warrant such a stick.
    - 7y ago
tw1010 7y ago
Could someone explain to me why this is happening? Is it a metoo situation?
- moate 7y ago
  Here's a good read: https://www.vox.com/recode/2019/9/23/20879656/wework-mess-explained-ipo-softbank https://www.vox.com/recode/2019/9/23/20879656/wework-mess-ex... Short answer: No, it's not a sexual assault thing. It's a "shady self-dealing business" thing
  - josefresco 7y ago
    Sort of true ...there was an allegation made and lawsuit: https://www.vox.com/2018/10/12/17968668/wework-employee-sexual-assaults-lawsuit https://www.vox.com/2018/10/12/17968668/wework-employee-sexu...
    - moate 7y ago
      Him allowing a toxic culture in which shitty people were hired and allowed to behave poorly is very bad and likely helped push him out. However, those allegations aren't against Neumann, so I personally don't think this quite qualifies as a #MeToo strike against him specifically, but maybe I'm applying that concept too stringently?
- wankerrific 7y ago
  No. Its a “We” Too situation
DebtDeflation 7y ago
https://www.cnbc.com/2019/09/24/softbank-has-a-multi-million-dollar-protection-in-weworks-ipo.html https://www.cnbc.com/2019/09/24/softbank-has-a-multi-million... "But because SoftBank’s latest round was so large and the possible down-round was looking to be less than half of that, the provision was expected to result in the world’s largest IPO ratchet." Relative to Softbank's total investment, it's not a huge percentage, but relative to the amount expected to be raised in an IPO it certainly is.
rolltiide 7y ago
another open position https://www.indeed.com/viewjob?jk=cf0378114e63aeb4&from=tp-serp&tk=1dld0iag1430g802 https://www.indeed.com/viewjob?jk=cf0378114e63aeb4&from=tp-s...
anigbrowl 7y ago
As with Theranos, I told you early on it was a scam. If there's one thing a grouch knows well, it's how to spot trash.
- rurban 7y ago
  Totally different scam than Theranos. WeWork is a cult (like Apple), and has a poor business model, but it at least works. It just doesn't generate enough money, like with the Texas shale oil boom. Everybody thinks it's great, but it's not, they are loosing money and no turnaround in sight. Theranos never worked.
  - anigbrowl 7y ago
    It's a different sort of scam for sure - I should have made clear that I was basing this on my read of the star CEO rather than the business. I have a similar enough personality type to such folks that they're easy for me to spot. Rather than taking claims in good faith and doing extensive due diligence to assess their business-worthiness, if I read someone as a fake (an almost purely intuitive thing) and then look at their project with that working assumptions, the holes in their pitch are magnified into yawning chasms. It's not perfect, of course. I've been taken in by other sociopaths several times, but in personal or employment contexts where it was a 1:1 relationship. I'm not money-oriented so sociopathic entrepreneurs stand out like a sore thumb because I don't have any feeling of excitement about an investment opportunity to get in the way. It's like being able to spot a good or bad athlete in a sport you don't play, if that makes sense.
nacs 7y ago
Dupe: https://news.ycombinator.com/item?id=21062260 https://news.ycombinator.com/item?id=21062260 @dang
- dang 7y ago
  That one was posted later so we've merged it into this one.
- jimmyvalmer 7y ago
  "How I Built This Episode WeWork: Miguel McKelvey" (June 19, 2017) Host: Do you think all of this could just collapse one day? McKelvey: You know it's a great question. One of the things we're holding onto very tightly is the feeling that we're still figuring it out every day... We'll have that learning curve forever which is what make it awesome. I guess "awesome" is one way of putting it.
thewarrior 7y ago
Could this be a turning point in the current tech bubble ? Might be a good opportunity to bring valuations back to sane levels before things get too extreme and damage lots of livelihoods.
- maxlamb 7y ago
  Except that WeWork is not a tech company
- brown9-2 7y ago
  It already is, this and Uber’s disappointing IPO.
jedberg 7y ago
So he gets to keep all the leases that his company made against his properties that are collateralized by the value of his company? Essentially they solved the self-dealing issue by removing the self instead of removing the deals?
- cbanek 7y ago
  Interesting point. Although if they broke the leases, I'm sure that would also line his pockets (from early termination fees) without necessarily getting anything out of it?
deleted 7y ago
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jfb 7y ago
Those deck chairs aren't going to rearrange themselves!
deleted 7y ago
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doctorpangloss 7y ago
Not to generalize, but if you relied on Hacker News for recruiting you could wind up in all sorts of wonky, dubious or failed companies. Like people were such sweethearts for Juul and Alt Schools. They’re also really skeptical of Google, which for all its faults is, without a doubt, the single best deal for employees in the history of the world, at least since the time that anyone was legally or culturally allowed to take such jobs in this country. That’s coming from a noted skeptic! Personally I’ve always found that libertarian ethos in support of crappy things, like shitty schools and tobacco, and opposed to nice things, like healthy kids, frustrating. Like on the one hand there’s a kind of engineer who finds the most abstract IT infrastructure so stimulating, something totally removed from actual concrete stuff with even an iota of moral, emotional or socioeconomic consequence. But then when the schadenfreude gets going, an emotion that these supposedly stoic people seem to have in spades, they have opinions about fucking everything. And then when it comes to hills to die on, they finally choose to die on the Hill of Nicotine. So like sure, say no to some recruiter. But if you trust the aggregate opinions of people on this board, with its profound adverse selection, get ready to be disappointed.
- LeanderK 7y ago
  this reads like a rant but I am not sure what it's ranting about. I've read it three times but I am still not sure whats going on. People having opinions? I read a lot of great advice (also about recruting) on HN and I don't really get why I should be concerned. Also starts with "Not to generalize" but then has a really wonky generalization.
  - wolco 7y ago
    It's more don't follow the opinions here like it's religion because you will learn tech no one uses in the real world and miss out on great companies like google. I get the impression google is seen as the best employer at least paywise mosly from comments on here. Go figure.
  - JackFr 7y ago
    Well sometimes when you're in an echo chamber it's tough to tell. Everyone just seems ... right. On the other hand, even if there is a diversity of opinions within comments, it's very easy to self-curate with a heavy dose of confirmation bias. So while HN can be a valuable source of information, it's useful to remain skeptical and avoid self-congratulations.
jcims 7y ago
Can anyone explain why we're seeing so much WeWork content in the news? Is it because they have so many customers in the tech industry?
- michannne 7y ago
  Because it's popular..
- twic 7y ago
  I think it's because it's a totally crazy story. WeWork is the Florida Man of startups.
- gkanai 7y ago
  It was one of the largest startups by valuation (no more)...
- kevstev 7y ago
  It has a lot of echoes of the .com boom, with a modern twist- the pitch has changed a bit, its not just about losing money at scale, its about changing the world while doing so, with a nostalgic dose of delusion- saying their potential market is the entire real estate market worth trillions of dollars. Add in a self dealing CEO, and the human attraction to watching disasters unfold, and here we are.
- tqkxzugoaupvwqr 7y ago
  There is a lot of drama unfolding. “We” planned to IPO, its last evaluation was $47 billion. After outsiders reported irregularities its evaluation plummeted quickly to $10 billion and the IPO is postponed until October, but probably shelved for much longer. We’s CEO knew the bubble was about to burst and sold his shares pre-IPO for $700 million. I recommend: https://www.profgalloway.com/wewtf https://www.profgalloway.com/wewtf (from Aug 16) https://www.profgalloway.com/wewtf-part-deux https://www.profgalloway.com/wewtf-part-deux (from Sep 20)
xivzgrev 7y ago
Wow I am floored. Given how he had structured the company so favorably toward him, I’m surprised he could put his ego in check for this. Their back must be really against a wall if they don’t raise that $3 billion
- drevil-v2 7y ago
  I read an article that Adam Neumann has a $700 million line of credit against his WeWork shares and has already drawn down around $550 million of that (to purchase real estate and lease back to We). After the IPO valuation downgrade the banks are now questioning the value of his collateral WeWork shares and could force a margin call. I think this might be driving it.
  - mruts 7y ago
    Also he took out credit against his shares to buy even more shares! I guess I can't fault him for believing but it sounds like an unwise move to me.
jld 7y ago
He flew too close to the valuation sun.
- misterkgb 7y ago
  Too close to the Son?
- fullshark 7y ago
  Also he's the worst example of these issues so he's being singled out. If there had been another more ridiculous CEO out there doing these shenanigans he would have probably flown under the radar.
CzarnyZiutek 7y ago
why WeWork is a constant source of `NEWS` on HC?
joshpadnick 7y ago
I'm sure I'll get downvoted for this, but I actually just signed up to be a (thankfully month-to-month) WeWork customer for a HotDesk today in Phoenix, and it's actually been a pretty great experience: Great space, nice people, reasonable IT, I was up and running and working within 30 minutes of doing my tour. And yes I've had a cup of the famous We Kombucha. This particular location just opened 3 weeks ago and is apparently already at 70% capacity with a mix of enterprises and startups. Even my Hotdesk membership can't start officially until Oct 1 because they're apparently sold out (though walking around there's plenty of space). Based on these surface observations, the core business at least seems "plausibly profitable". But all the crazy side businesses like co-living just seems like overexpansion to me. I'll politely decline as an investor, but I'm happy to sign up as a lowest-tier, month-to-month customer.
- asah 7y ago
  Friend reports the same. But hotdesking doesn't support a $10+B valuation.
- nikanj 7y ago
  There’s a massive jump from plausibly profitable, to a umptillion billion unicorn. Of course re-leasing office space can be profitable, companies have been doing that profitably for decades - if not centuries. But those companies have not received Silicon Valley valuations
- vegannet 7y ago
  The reason WeWork is great is because investors are subsidising our memberships, just like Uber is cheap because investors are shovelling in cash. WeWork has the potential for profitability if you take away the ridiculousness but the ridiculousness _is_ WeWork: co-working spaces have existed for years, companies like IWG (Regus) offer the same as WeWork and they're profitable... because they don't have a full time bar staff, a live DJ and a skateboard ramp in their lobby. Yes, the new flagship WeWork in London has a skateboard ramp and live DJ in the lobby. When WeWork fails (and their spaces are scooped up by the mature players in the market) the ridiculousness will disappear and we'll be left the same space that has been available all along. I like WeWork, WeWork has value, but ping-pong and baristas don't make for 10x valuations.
ram_rar 7y ago
I am soo glad, that I cancelled my interview with WeWork. I feel bad who bought into the hype recently and joined the company.
bombas 7y ago
My interview with WeWork was for a dev role.. Recruiter emailed me a 'homework' assignment. This homework assignment was basically work they needed to get done and offed it on candidates to finish.. I noped out of that pretty quick.
- byeadam 7y ago
  Some people are actually ok with this as long as it's not really the work, but similar to the work being done. Good for you that you noped out pretty quick.
mataug 7y ago
I can just imagine Prof Galloway taking victory laps and talking about how the big dog is awesome ! https://www.profgalloway.com/wewtf-part-deux https://www.profgalloway.com/wewtf-part-deux https://twitter.com/JordanBitterman/status/1176549401621348352 https://twitter.com/JordanBitterman/status/11765494016213483...
- avs733 7y ago
  It never occurred to me just how pretentious/bad the name 'We' is until reading that article... >We will now need additional capital from the private markets, who are no longer under the influence >We has gone from unicorn to distressed asset in 30 days. >In just seven days, We lost more value than the three biggest losers in the S&P 500 have lost in the last year combined: Macy's, Nektar Therapeutics, and Kraft Heinz. I have to pause each time and re-engage my brain to realize he is talking about the company and not himself. I'm significantly enjoying the level to which this fiasco has made investors look like dolts. One can only hope that it does something to pierce the narrative about the possession of capital making people visionary
  - mrguyorama 7y ago
    >Kraft Heinz Super off topic but why the heck is Heinz losing so much value?
    - kgbdrop1 7y ago
      You got me curious as well. https://www.nytimes.com/2019/09/24/business/kraft-heinz-food-3g-capital-management.html https://www.nytimes.com/2019/09/24/business/kraft-heinz-food... lists a boatload of issues.
      - deleted 7y ago
        [deleted]
      - spookthesunset 7y ago
        That is just sad. Both of those were staples of childhood... td;lr - Both kraft & heinz were slammed together by a company that bought them both out and then forced them to cut a ton of costs. As it turns out, you can't just cut costs and expect to grow and prosper as the market changes around you. PS - in the article they mention they took away the free office snacks. Taking away perks like that is always a sign that you should head for the exits...
artsyca 7y ago
There are a lot of large and small ironies at play, but the one that irks me the most is the interrelation between `investment` in the financial sense and `investment` in the dress sense, for the word has its root in the word `vestment` which means `clothing` (https://www.etymonline.com/search?q=investment https://www.etymonline.com/search?q=investment) I keep asking myself how startup culture has gone so far off the rails in terms of professional business tropes, even while they court traditional financial backing to the point where the emperor's new clothes scenario is playing out in front of us and we barely even notice? One word: entitlement Could this fellow have stood a chance if he wasn't so nonchalant with his appearance opting for the messianic playboy look rather than the modest preppy techie? I'm sure this comment will get downvoted to oblivion but what are imaginary internet points for if not spending on counterculture opinions? I say the reason this all fell apart is because the guy is simply unlikeable and his shitty entitled-looking Keith Raniere-esque stage presence did nothing to help
- artsyca 7y ago
  -> A little meme for y'all because it would be so cool to see a guy who calls his company `WeWork` actually wearing a work shirt for once: https://ibb.co/WnFDvfb https://ibb.co/WnFDvfb
- dropit_sphere 7y ago
  "but what are imaginary internet points for if not spending on counterculture opinions?" Hear hear!
avs733 7y ago
Honestly, this was inevitable. What it makes me wonder long term is who else will be impacted, how it will spread. I can't help but wonder if Musk is next...[0] [0]https://arstechnica.com/tech-policy/2019/09/solarcity-was-insolvent-when-tesla-paid-2-6-billion-to-buy-it-lawsuit-says/ https://arstechnica.com/tech-policy/2019/09/solarcity-was-in...
antoniuschan99 7y ago
From the article lol: Further undercutting his position: eccentric behavior that was detailed in a Journal articlelast week, such as a party-heavy lifestyle that included marijuana use in an airplane and unpredictable management decisions.
SamAbrika 7y ago
Everything stinks in this ponzi scheme company. For those who haven't read it: https://medium.com/@henry.hawksberry/is-we-work-a-fraud-5b78987d3e61 https://medium.com/@henry.hawksberry/is-we-work-a-fraud-5b78...
alexnewman 7y ago
Every 20 years another company takes out long term debts when credit is cheap. It always crashes and it always brings its business partners with them. This should be unlawful and we need gov't organizations to never allow this type of risk to be taken.
qaq 7y ago
Too bad they did not get a chance to start WeInsure and subsidize medical insurance for a lot of people.
byeadam 7y ago
People work for people. Not the company. That said, I've spoken to lots of WeWork employees in the past. If you had a simple job, Adam wanted to know how you could do it faster, or automate it (with you out of work). If you worked on the tech side which seemed to be Ruby on Rails with Bootstrap, well, you were in New York at first, but then Adam would accuse techies of not thinking big enough, or not delivering 5 points worth of features in the time it took 1, and where's the mobile app? The guy knew absolutely nothing about technology, and when he outsourced the reservation system to India, then I knew it really had nothing to do with innovation. What's worse is lots of folks worked there expecting six figures before the outsourcing, but got nickel'd & dimed to something way under six figures. All without a PIP. Edit: removed exact salary amounts because my sources said it would out them.
finphil 7y ago
Not surprised. IMO WeWork is not bad concept, they have built brand-awareness and a solid real-estate portfolio BUT some actors often magnify what the company actually is ...TBC
banglaman 7y ago
Appending ?mod=rsswn to the URL is not bypassing the pay wall anymore
postit 7y ago
I work in one of the companies WeWork acquired. The first time I heard Adan in a townhall I kept wondering, what kind of hell is happening to the world so that guy was sitting in a massive pile of money thanks to VCs. His nonsense and lack of business mindset were evident in every interaction and announcement. So IMHO he deserves that. The issue is that now we have +10k people wondering about their future because they have bills to pay and a hard path ahead. Meanwhile, Galloway brags about how he was right during all this time and suggest massive layouts to save "investors." I'm getting tired of this.
gregjw 7y ago
Timber.
tibbydudeza 7y ago
Up next .. Softbank and their "Vision" fund.

728 points by mudil 7y ago

alephnan 7y ago

Given a choice, would founder/CEOs with big personalities prefer being powerful or rich?

austenallred 7y ago
rich, but they're the same thing
OatMilkLatte 7y ago
Given that you can't really have power without being rich, I question the assertion that this is a choice :)
- brianwawok 7y ago
  Many previous presidents of the US were "very well off" but not Rich in the warren buffet sense (Obama comes to mind). Possibly the most powerful position in the world. Many generals of the US army are not "rich". I suspect there are some cabinet positions that don't pay a lot, but offer a lot of power...
  - jriot 7y ago
    Ulysses S Grant comes to mind.
deleted 7y ago
[deleted]

hendzen 7y ago

I guess he has more time now to focus on his campaign for president of the world.

dang 7y ago
Maybe so, but please don't post unsubstantive comments here.

rahkiin 7y ago

And what about the buildings he leases to We? Or what about his wife?

onlyrealcuzzo 7y ago
I'm interested about the buildings. A lot of people bullish on WeWork say -- "Oh, they'll just walk away from the leases. Each lease is owned by a different subsidiary. That subsidiary will just file bankruptcy. Problem solved. They'll just cut the losers, and turn up the dial on the profitable buildings." Adam got a $750M loan from WeWork, right? I'm assuming he used that loan to secure more loans to buy the buildings he then rents back to WeWork (at a profit). I wonder what happens to him if WeWork walks away from his buildings. I doubt he has the cash to hold onto those buildings for more than a few months without a client -- especially if WeWork is still private. If they go public before they "walk away" from his buildings, he'll have to sell massive amounts of stock to cover his losses. Unless we get to negative interest rates, I don't see a future that looks good for WeWork.
- somebodythere 7y ago
  How do the negative rates benefit WeWork?
  - WJW 7y ago
    Because they are net borrowers and lower interest rates mean they have to pay less interest.
- kerkeslager 7y ago
  > "Oh, they'll just walk away from the leases. Each lease is owned by a different subsidiary. That subsidiary will just file bankruptcy. Problem solved. They'll just cut the losers, and turn up the dial on the profitable buildings." Ugh. What an awful culture we live in where this is considered perfectly normal behavior.
  - woah 7y ago

okhumans 7y ago

OK faith in humanity restored. Glad the "we'll we didn't hide any of the adam neumann transgressions from you! Look at the s-1!" didn't work out..

buboard 7y ago

Doesn't that ... devalue the company? they re now a real estate company without a spiritual leader

rtkwe 7y ago
They were always a real estate company, they just didn't get to IPO under the SV hype because as it got closer people looked closer at the company and realized the valuation was ridiculous and the CEO was lining his own pockets acting as landlord to his own company. Now that that's happened and it's all come out he has to step down.
- buboard 7y ago
  the way you described it, it's like a cult lost its leader
  - celticninja 7y ago
    Cult of personality
  - rtkwe 7y ago
    Yeah somewhat. Though instead of it's leader it lost it's appeal and the cult leader had to go into hiding. WeWork is still a decent business idea just no where near the crazy valuations it was given.
    - hilbertseries 7y ago
      Given how much money wework has lost this year, I think it remains to be seen if they’re a decent business.
      - rtkwe 7y ago
        I mean more the underlying model seems like it should work. There's tons of successful coworking spaces it seems and that's a lot of what WeWork did just with the option for company size teams.

Jaygles 7y ago

You've got to wonder what kind of a person is it that can get so far in building a successful behemoth like this but at the same time is able to seriously put forward ideas like becoming President of the world or asking management to cut 20% of the workforce yearly

strikelaserclaw 7y ago
Someone with unbridled belief in themselves.
- ngngngng 7y ago
  I lean towards this being ignorant hubris. I don't think he set out to scam investors.
  - jonknee 7y ago
    It's not ignorance to sell your company its trademark or to buy a building with a loan backed by company stock and then have the company lease it from you at a tidy profit.
  - michaelt 7y ago
    I don't think he set out to scam investors. I tripped, fell, and when I put my hand out to catch myself I accidentally had the company give me a loan to buy a building that I leased back to them.
    - okhumans 7y ago
      LOL +1
  - anigbrowl 7y ago
    Let me give you an insight into the thought process here: 'It's not unethical if I don't feel bad about it.' The key to operating this way to is cultivate a sense of belief in your own BS - inspire others by having the 'vision thing', saying 'I wish you could see what I can see' etc. Ignore anything negative and devote as little thought to it as possible because what people are buying into is your sunny disposition - they don't really want to analyze your stuff, they want to feel the way you look: radiantly confident. So you just think happy thoughts and if anyone asks you troubling questions re-articulate your vision of heaven/ profits/ national pride/ whatever and make a performance of being nurtured by that beautiful vision alone, before mentioning that anyone can share it for 3 easy payments of $____.

conroy 7y ago

From "We Wants a New Boss"[0], written yesterday in Money Stuff: > ...it’s terrible for SoftBank! The message from SoftBank is pretty much “your [Neumann's] job was to extract billions of dollars out of us, and you succeeded at it admirably; now that you’ve served that purpose, we should replace you with a real-estate CEO to salvage the value of your investment and ours.” [0] https://www.bloomberg.com/opinion/articles/2019-09-23/we-wants-a-new-boss https://www.bloomberg.com/opinion/articles/2019-09-23/we-wan...

rwmurrayVT 7y ago
There was another good segment on it today. From "WeKeepGoingWithThisHuh"[0] >...Or I guess maybe the IPO bankers leaked it because they want Neumann gone, to make the IPO easier, and want to commit Son to it by leaking. Or because they love messy drama maybe? It’s not their company. The even funnier part of the segment is when he gets into what some of the banks actually put out as a reasonable IPO valuation. >...JPMorgan told WeWork executives the company could be worth between $46bn and $63bn in the listing. Goldman pegged the equity at between $61bn and $96bn. Morgan Stanley estimated WeWork’s valuation at between $43bn and $104bn in a presentation in 2018, though a pitch for the IPO set it at a more modest $18bn-$52bn. [0]https://www.bloomberg.com/opinion/articles/2019-09-24/don-t-steal-the-payrolls https://www.bloomberg.com/opinion/articles/2019-09-24/don-t-...
- human20190310 7y ago
  At what point do these deranged estimates start damaging the credibility of the estimators?
  - bduerst 7y ago
    Probably when making bad over estimations starts costing them.
  - rwmurrayVT 7y ago
    It would seem like never. Matt Levine had another interesting take on that as well. [0] >... 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] [0]https://www.bloomberg.com/opinion/articles/2019-09-09/we-mig.. https://www.bloomberg.com/opinion/articles/2019-09-09/we-mig....

whoisjuan 7y ago

This is some dense shit. I can't imagine how working for WeWork feels like, right now. I have worked for companies where all the employees were eagerly waiting for the day the company will go public. It was seen as a pivotal moment both financially and professionally. In any rational world that's a landmark moment. A significant milestone for founders, investors and early employees. For WeWork it has been the complete opposite. They filed to go public and everything is going south since then. Must be surreal that what seemed to be the start of a bright future may be very well the start of a dark end.

rwmurrayVT 7y ago
I imagine it feels like you just lost 50%+ of your net worth. If there's no liquidity then you never know when you could get screwed!

Ericson2314 7y ago

What pressure is this with the crazy different classes of stocks?

ngngngng 7y ago

I'm so glad I read hacker news. I almost took a job at WeWork just 2 months ago with a recruiter working very hard to convince me I'd be rich when they IPO. Now I'm at a much smaller startup called Weave which is a really phenomenal place to work. I didn't discover until recently that it's also a YCombinator company. edit: to clarify, hacker news has been extremely skeptical of WeWork for some time, due to this, I was extremely wary of their offer and leaned towards (and eventually chose) other options.

nickstinemates 7y ago
Good people at Weave, awesome it's working out!
deleted 7y ago
[deleted]
alasdair_ 7y ago
I also dodged this bullet two months ago. They were hiring like crazy in Seattle. Thanks HN!
- mcny 7y ago
  Insane. This story is number one on hn for me and right below it in number two is https://news.ycombinator.com/item?id=21062231 https://news.ycombinator.com/item?id=21062231 > WeWork, Bankers Have Discussed Laying Off One-Third of Workforce (theinformation.com) If you, the reader, have an offer from WeWork, I suggest you ask for a bigger paycheck (like real money, not funny money) for all this uncertainty.
  - moltensodium 7y ago
    At this point there is a non-zero and growing chance the company collapses completely. They have no plans or research or any other projects that are expected to make money, ever, and nobody seems interested in another round of fundraising. They will likely try to force the IPO through anyway at some sub $5B valuation, but even then it seems like they may not generate much interest after that cuckooville S1.

DebtDeflation 7y ago

I'm guessing the "Non-Executive Chairman" position will just be a temporary one until they can come to agreement on how much money they need to pay him to go away. Professor Galloway called this the other day. His next prediction is that We will sell off all the bullshit vanity projects like WeLive and WeGrow along with the other nonsense Adam bought (like the wave pool company so he can practice surfing at work). Then they will fire all non-core employees. The clock is ticking if they want to save this company.

chrshawkes 7y ago
Is this true or an exaggeration? I couldn't find anything on it.
- DebtDeflation 7y ago
  https://www.profgalloway.com/wewtf-part-deux https://www.profgalloway.com/wewtf-part-deux It was published on Friday and so far he is knocking it out of the park with these predictions.
paggle 7y ago
I don't think they will shut down WeLive. The entire premise of WeWork, and WeLive, is that they can sell you more than real estate -- they can sell you a "tribe." There are so many reports in recent years about growing social isolation and loneliness, that if something can be successfully packaged into a simulacrum of a community, it will be a hot item indeed. That's the only way WeWork can justify its stratospheric investments, and it is the market they will aim to dominate.
- DebtDeflation 7y ago
  I'm sorry, but while there is some logic to the co-working idea, I don't see any serious demand for co-living. Quite frankly, I find the idea of having on-premise yoga instruction, cafes, bars, shared hot tubs, shared kitchens, etc. so you never have to leave your apartment building (except, presumably, to go to WeWork) to be absurd.

duxup 7y ago

Does it change the financials, not sure what this does for them?

formercoder 7y ago
Corporate governance is just as important as financials. There is no point investing in something that is out of control.

jamestimmins 7y ago

I get the impression that SoftBank learned the wrong lesson from Uber. While Uber also raised billions of dollars and had a CEO get forced out by investors, it was broadly understood that his sin was creating a toxic/sexist culture. It wasn't related to business fundamentals, per se. WeWork's sins were less of rampant sexism, and more closely related to an unreasonable valuation and a business that wasn't prepared for the current IPO climate. In other words, they were things for which the investors are also culpable. I'm not a founder, but I'd be very hesitant to raise from SoftBank if I was (and very nervous if I had already raised from them). With Benchmark (and Uber's other investors), I'd only be worried if the toxic culture I created was putting their investment seriously at risk.

dbuder 7y ago
Don't be in awe of any VC or banker and hire your own lawyer.
dehrmann 7y ago
> it was broadly understood that his sin was creating a toxic/sexist culture Excluding the sexism, the toxic parts go hand-in-hand with the mindset Uber needed to ignore incumbents and regulations. The only reason Uber was successful was because of that attitude. Where it failed was growing up.
- mason55 7y ago
  > The only reason Uber was successful was because of that attitude. Where it failed was growing up. Which, by the way, is not a weird thing. Different stages of a company lifecycle require different types of leadership.
hobofan 7y ago
> it was broadly understood that his sin was creating a toxic/sexist culture. It wasn't related to business fundamentals, per se. So it had nothing to do with: - General disregard for regulation - Blocking regulators from the plaform via Greyball - Corporate espionage - Waymo vs. Uber From my impression at the time he was forced out primarily because of actions like those last two (only few of many), because they have the potential to cost Uber serious money (sexism sadly not so much).

arkj 7y ago

Comedy!!!

sg47 7y ago
Company - WeBroke Investors - WeWoke Employees - WeQuit
dang 7y ago
Please don't post unsubstantive comments here.

john_moscow 7y ago

Well, corporate governance was one of the main factors why the market refused to accept anything close to their last private valuation, so this makes sense. Note that they desperately need the public money before the end of December in order to avoid running out of cash [0]. My bet is that they will now try to remarket We as a shareholder-controlled company, will maybe even eliminate the multi-class stock structure in order to get included into the passive funds. I am still not sure they will ever become profitable through. The only way to disrupt the incumbents in an established market like this one would be to spot a new opportunity in the market and capitalize on it faster than the slow 30-year-old companies like Regus. Except the only market opportunity We has successfully exploited by now are the desperate investors ready to shove billions in your hands if you pretend to be a cool techy thing they don't fully understand. [0] https://www.reuters.com/article/wework-loan/clock-ticking-down-on-weworks-us6bn-loan-after-ipo-delayed-idUSL2N26A0VF https://www.reuters.com/article/wework-loan/clock-ticking-do...

rwmurrayVT 7y ago
I just don't see them wrestling control away from the deranged, cult leader. He truly believes he is destined to be president of the world and revolutionize.. well every thing. There best bet would be to drop the multi-class structure to get into passive funds. It needs $8.1b market cap to get into S&P500.
- 0xB31B1B 7y ago
  It also needs to be ebita profitable for 8 quarters in a row before its added to the index IIRC
  - rwmurrayVT 7y ago
    I think it's most recent quarter + 4 previous. I'm also fairly certain it's selected by committee. I'm no finance expert, hence the securities fraud conviction. I don't really know which index it could get into with a high amount of passive investment.
- YPCrumble 7y ago

whoisjuan 7y ago

jonknee 7y ago
WeWork has been an obvious fuckup to even casual observers for years, if people inside the company couldn't see this I really don't know what to say.
- brianpgordon 7y ago
  All the more reason for employees to be excited about the opportunity to finally see liquidity for their shares.
  - jonknee 7y ago
    Well my point is it should have been obvious the shares were absolutely worthless.
  - ghaff 7y ago
    A lot of people convinced themselves that if they could just make it to the IPO at least they’d have a lucrative way off the shipwreck. Oops.
- pat87 7y ago
  It’s hard to see things when your salary depends on you not seeing said things.
- ImprovedSilence 7y ago
  I can see how their leadership is a bit bush league and they are potentially overvalued, but it’s not obvious to me that their basic value proposition sucks or is that far off the mark.

mharroun 7y ago

Wow does a day not go by that we get new news of wework falling apart?

brink 7y ago
WeWork is an easy target. It's like no matter what they do, they're getting shot at.
- short_sells_poo 7y ago
  Let's be honest, in your analogy, WeWork painted a giant target on their own back, put on a shit eating grin, raised a placard saying "I crapped on your lawn and fondled your wife" and started parading through the target end of the All National Homecoming Machinegun and Automatic Weapons Competition range, all the while their CEO handed out 1000 round ammo cans at the entry. To say that "they were asking for it" would be a huge understatement. The night shift janitor of the building two blocks down from their offices would have called this.

rconti 7y ago

The latest Slate Money podcast had a great segment savaging Neumann. https://slate.com/podcasts/slate-money/2019/09/slate-money-on-uber-and-wework https://slate.com/podcasts/slate-money/2019/09/slate-money-o...

ryanwaggoner 7y ago
Their criticism of just about anything rings hollow since two of the hosts basically hate just about everything associated with money and capitalism, despite their staggering ignorance of many corners of it. Their guests and Anna Szymanski are the only non-embarrassing parts of the show for me, but I still eventually just gave up and stopped listening.
- eclecticsceptic 7y ago
  I think you've got that backwards. Anna is an unabashed capitalist who refuses to criticise even the shadiest goings-on in finance, start-ups etc. Felix and Emily seem to have a good nose for nonsense, like wework.
  - rconti 7y ago
    Well, it looks like we've covered both sides of the arguments :) I guess my take is somewhere between these two comments. I sometimes hate the way it feels like Anna plays a "contrarian character" no matter what, and yes, Felix and Emily can sometimes be a bit too.. "NPR do-gooder, feel-gooder" for my taste. But I really enjoy the show regardless. It's a saturday morning long-run staple for me.

dbancajas 7y ago

what does 'pressure' actually mean? How is it exerted by outside investors?

jiveturkey 7y ago

wow! that was quick. surprising to say the least. these kind of people tend to be driven by ego, so this must have hurt. looks like he'll still be chairman though.

easytiger 7y ago
My assumption has been he will step aside, wait for an inevitable restructuring post IPO markdown (and blame the markdown on his being pushed out) then swoop in and take the credit for getting it back on track

cgearhart 7y ago

I had concerns earlier this year when I interviewed at WeWork—which was the worst interview experience I’ve ever had. I applied for a data science role. The first two hours of the on-site were painful—they seemed to be asking questions tailored to be outside my experience. The third interviewer came into the room and said, “I, uh, just looked at your resume and I have to ask, why do you want to be a backend engineer?” :facepalm: I showed him my application for a DS role, so he left and came back with a DS guy who made up an interview on the spot. I (fortunately?) didn’t get a call back.

metalliqaz 7y ago
WeWork is basically a real estate company. Why would they need a data science engineer?
- LargeWu 7y ago
  Because they are cosplaying as a tech company.
  - metalliqaz 7y ago
    I guess that's how you get those SoftBank billions.
    - hef19898 7y ago
      Only thing missing is a plan to get as much of these billions out of the company into your own pocket then, I guess. Not that stupid from a purely self-serving perspective. Ignores every aspect of corporate governance and business ethics, so. Not that SoftBank seems to care if they can get an IPO.
  - Wellrowed 7y ago
    The email I received after applying for a job many months ago: “Thanks so much for taking the time and interest in applying to WeWork Global Technology. Your application has been received and we will review it as soon as possible. Once we've had a chance to review we'll be in touch on possible next steps, thanks again for the time! Regards, WeWork Global Technology”

jiveturkey 7y ago

> recruiter working very hard to convince me I'd be rich when they IPO recruiters still do that? so unethical.

nickstinemates 7y ago
bad ones do. they'll be selected out of the industry over time.
- kamarg 7y ago
  Unfortunately there's always new recruiters that are willing to press this point either because they believe it or they just want the commission and will say what it takes to place a candidate. This is not something that will be fixed just by having the "bad" recruiters slowly removed over time. It's a constant task to educate job seekers that such an event is very unlikely.
- OatMilkLatte 7y ago
  The problem is, they aren't being selected out of the industry...they're becoming the industry.
- rongenre 7y ago
  There's almost no barrier to entry to become a recruiter.
- compiler-guy 7y ago
  Recruiters get paid by the companies seeking employees. If these tactics do indeed provide employees, then the company pays them and they stay in the business. Recruiters are selected for recruiting talent. As long as the talent stays for some length of time that the recruiter isn't blamed for poor retention, then the recruiter wins. This time is months, not years. That's why recruiters who work these angles still exist. It's not like this is a new phenomenon. It has been going on as long as there have been tech-recruiters. If they did get selected out, they would all be gone already.
tudelo 7y ago

rcardo11 7y ago

Sorry for my ignorance on this, but recently I find that top hacker news articles need a paid subscription. Do you have a trick for accessing them or just everyone here has a paid subscription?

redisman 7y ago
I guess people just read the headline. AFAIK Incognito tricks don't work anymore so I also can't read these articles at all.
- mcphilip 7y ago
  Anecdotally, on both mobile and desktop I’m able to hit the X button on Chrome after the content loads but before the paywall shows and read the entire article.
istjohn 7y ago
Try archive.is
x13 7y ago
https://github.com/iamadamdev https://github.com/iamadamdev may help
deckar01 7y ago
console.log(document.querySelector('.meteredContent').innerText.replace(/(.{80}\w*)\s*/g, '$1\n'))
eggsthedev 7y ago
I use uBlock Origin, I don't know if it helps block the subscription popup but I can read it properly in Firefox.
Traster 7y ago
On NYT in particular, load the page, when the text loads hit escape and the subscription nag simply doesn't load. It's not particularly ethical, but on the other hand maybe NYT should get serious about the software that's meant to protect its business model.

WhompingWindows 7y ago

WeWork's business model is convincing investors they are a tech company with a dozens-of-billions valuation. I am glad HN, amongst others, have torn down this real-estate company wearing a tech-unicorn-mask.

rolltiide 7y ago
> WeWork's business model is convincing investors they are a tech company with a dozens-of-billions valuation That's their recruiting model too. These cults have people married to them their whole career and don't even know they are a laughing stock. They have conversations with their friends like "well joining a tech company has been very different from my old cubicle farm!"
buboard 7y ago
Ironically, the company is in the front page of HN for two days. If Tech really didnt care (they do - they ve invested in it) they wouldn't give a toss about a RE company.

perseusprime11 7y ago

It still does not make it a tech company and does not justify the valuation. The business at the very core is not healthy and needs cash to even survive. Institutional investors will not take the bait with no upside.

jchallis 7y ago

WeWork's Bond Prices are falling rapidly.These are the only financial instruments that measure market appetite. Someone thinks they might not be paying back the money they are borrowing. https://www.reuters.com/article/us-wework-ipo-debt/wework-bond-prices-falls-after-softbank-questions-ceo-marketaxess-idUSKBN1W81J0 https://www.reuters.com/article/us-wework-ipo-debt/wework-bo...

freddie_mercury 7y ago
You added the editorial "rapidly", which doesn't appear anywhere in the article linked because the fall isn't rapid. It fell 1.1%, which is not rapid, especially for something that was already rated a junk bond. And without any data on the bond's previous price volatility it isn't impossible to say whether 1.1% is worse than it had, say, the week before.

nytesky 7y ago

I assume he still retains the gobs or cash extracted through all his shenanigans and controlling shares? And thus could reinstate himself after IPO?

knd775 7y ago
They loaned him a lot of the money that he used to buy the properties. It remains to be seen how the loans are structured, but it's possible that the company can call in their loans and put him in a position that he needs to sell properties.
- anaphor 7y ago
  Wouldn't he still be making money on the sale, unless the loans gain the same amount of interest as the amount the properties have appreciated by?

DebtDeflation 7y ago

CNBC reporting his Class B and C shares will be further reduced from 10:1 to 3:1 voting rights, so he no longer will control the majority of votes. https://www.cnbc.com/2019/09/24/wework-ceo-adam-neumann-is-expected-to-step-down-amid-controversy-and-retain-chair-role-wsj-reports.html https://www.cnbc.com/2019/09/24/wework-ceo-adam-neumann-is-e...

609venezia 7y ago
Wow. That's a surprise. I wonder what kind of stick they had to beat him into that?
- DebtDeflation 7y ago
  Softbank probably made it clear to him that if there is any hope to salvage the IPO and have a chance at a lucrative exit, this is the only path forward. That or they found his cereal box and threatened to call the cops.
  - gberger 7y ago
    > That or they found his cereal box and threatened to call the cops. I'm sorry, I don't understand this part. Is this a reference to something?
    - kgwgk 7y ago
      Google “cereal box wework” and you’ll find a drug-related story in the WSJ.
- rocqua 7y ago
  I think Softbank could tank We stock by refusing to further finance them, and trying to sell them. That would also hurt Softbank though, so the question becomes, what was so bad about Neumann staying on to warrant such a stick.
  - 7y ago

tw1010 7y ago

Could someone explain to me why this is happening? Is it a metoo situation?

moate 7y ago
Here's a good read: https://www.vox.com/recode/2019/9/23/20879656/wework-mess-explained-ipo-softbank https://www.vox.com/recode/2019/9/23/20879656/wework-mess-ex... Short answer: No, it's not a sexual assault thing. It's a "shady self-dealing business" thing
- josefresco 7y ago
  Sort of true ...there was an allegation made and lawsuit: https://www.vox.com/2018/10/12/17968668/wework-employee-sexual-assaults-lawsuit https://www.vox.com/2018/10/12/17968668/wework-employee-sexu...
  - moate 7y ago
    Him allowing a toxic culture in which shitty people were hired and allowed to behave poorly is very bad and likely helped push him out. However, those allegations aren't against Neumann, so I personally don't think this quite qualifies as a #MeToo strike against him specifically, but maybe I'm applying that concept too stringently?
wankerrific 7y ago
No. Its a “We” Too situation

DebtDeflation 7y ago

https://www.cnbc.com/2019/09/24/softbank-has-a-multi-million-dollar-protection-in-weworks-ipo.html https://www.cnbc.com/2019/09/24/softbank-has-a-multi-million... "But because SoftBank’s latest round was so large and the possible down-round was looking to be less than half of that, the provision was expected to result in the world’s largest IPO ratchet." Relative to Softbank's total investment, it's not a huge percentage, but relative to the amount expected to be raised in an IPO it certainly is.

rolltiide 7y ago

another open position https://www.indeed.com/viewjob?jk=cf0378114e63aeb4&from=tp-serp&tk=1dld0iag1430g802 https://www.indeed.com/viewjob?jk=cf0378114e63aeb4&from=tp-s...

anigbrowl 7y ago

As with Theranos, I told you early on it was a scam. If there's one thing a grouch knows well, it's how to spot trash.

rurban 7y ago
Totally different scam than Theranos. WeWork is a cult (like Apple), and has a poor business model, but it at least works. It just doesn't generate enough money, like with the Texas shale oil boom. Everybody thinks it's great, but it's not, they are loosing money and no turnaround in sight. Theranos never worked.
- anigbrowl 7y ago
  It's a different sort of scam for sure - I should have made clear that I was basing this on my read of the star CEO rather than the business. I have a similar enough personality type to such folks that they're easy for me to spot. Rather than taking claims in good faith and doing extensive due diligence to assess their business-worthiness, if I read someone as a fake (an almost purely intuitive thing) and then look at their project with that working assumptions, the holes in their pitch are magnified into yawning chasms. It's not perfect, of course. I've been taken in by other sociopaths several times, but in personal or employment contexts where it was a 1:1 relationship. I'm not money-oriented so sociopathic entrepreneurs stand out like a sore thumb because I don't have any feeling of excitement about an investment opportunity to get in the way. It's like being able to spot a good or bad athlete in a sport you don't play, if that makes sense.

nacs 7y ago

Dupe: https://news.ycombinator.com/item?id=21062260 https://news.ycombinator.com/item?id=21062260 @dang

dang 7y ago
That one was posted later so we've merged it into this one.
jimmyvalmer 7y ago
"How I Built This Episode WeWork: Miguel McKelvey" (June 19, 2017) Host: Do you think all of this could just collapse one day? McKelvey: You know it's a great question. One of the things we're holding onto very tightly is the feeling that we're still figuring it out every day... We'll have that learning curve forever which is what make it awesome. I guess "awesome" is one way of putting it.

thewarrior 7y ago

Could this be a turning point in the current tech bubble ? Might be a good opportunity to bring valuations back to sane levels before things get too extreme and damage lots of livelihoods.

maxlamb 7y ago
Except that WeWork is not a tech company
brown9-2 7y ago
It already is, this and Uber’s disappointing IPO.

jedberg 7y ago

So he gets to keep all the leases that his company made against his properties that are collateralized by the value of his company? Essentially they solved the self-dealing issue by removing the self instead of removing the deals?

cbanek 7y ago
Interesting point. Although if they broke the leases, I'm sure that would also line his pockets (from early termination fees) without necessarily getting anything out of it?

deleted 7y ago

[deleted]

jfb 7y ago

Those deck chairs aren't going to rearrange themselves!

deleted 7y ago

[deleted]

doctorpangloss 7y ago

Not to generalize, but if you relied on Hacker News for recruiting you could wind up in all sorts of wonky, dubious or failed companies. Like people were such sweethearts for Juul and Alt Schools. They’re also really skeptical of Google, which for all its faults is, without a doubt, the single best deal for employees in the history of the world, at least since the time that anyone was legally or culturally allowed to take such jobs in this country. That’s coming from a noted skeptic! Personally I’ve always found that libertarian ethos in support of crappy things, like shitty schools and tobacco, and opposed to nice things, like healthy kids, frustrating. Like on the one hand there’s a kind of engineer who finds the most abstract IT infrastructure so stimulating, something totally removed from actual concrete stuff with even an iota of moral, emotional or socioeconomic consequence. But then when the schadenfreude gets going, an emotion that these supposedly stoic people seem to have in spades, they have opinions about fucking everything. And then when it comes to hills to die on, they finally choose to die on the Hill of Nicotine. So like sure, say no to some recruiter. But if you trust the aggregate opinions of people on this board, with its profound adverse selection, get ready to be disappointed.

LeanderK 7y ago
this reads like a rant but I am not sure what it's ranting about. I've read it three times but I am still not sure whats going on. People having opinions? I read a lot of great advice (also about recruting) on HN and I don't really get why I should be concerned. Also starts with "Not to generalize" but then has a really wonky generalization.
- wolco 7y ago
  It's more don't follow the opinions here like it's religion because you will learn tech no one uses in the real world and miss out on great companies like google. I get the impression google is seen as the best employer at least paywise mosly from comments on here. Go figure.
- JackFr 7y ago
  Well sometimes when you're in an echo chamber it's tough to tell. Everyone just seems ... right. On the other hand, even if there is a diversity of opinions within comments, it's very easy to self-curate with a heavy dose of confirmation bias. So while HN can be a valuable source of information, it's useful to remain skeptical and avoid self-congratulations.

jcims 7y ago

Can anyone explain why we're seeing so much WeWork content in the news? Is it because they have so many customers in the tech industry?

michannne 7y ago
Because it's popular..
twic 7y ago
I think it's because it's a totally crazy story. WeWork is the Florida Man of startups.
gkanai 7y ago
It was one of the largest startups by valuation (no more)...
kevstev 7y ago
It has a lot of echoes of the .com boom, with a modern twist- the pitch has changed a bit, its not just about losing money at scale, its about changing the world while doing so, with a nostalgic dose of delusion- saying their potential market is the entire real estate market worth trillions of dollars. Add in a self dealing CEO, and the human attraction to watching disasters unfold, and here we are.
tqkxzugoaupvwqr 7y ago
There is a lot of drama unfolding. “We” planned to IPO, its last evaluation was $47 billion. After outsiders reported irregularities its evaluation plummeted quickly to $10 billion and the IPO is postponed until October, but probably shelved for much longer. We’s CEO knew the bubble was about to burst and sold his shares pre-IPO for $700 million. I recommend: https://www.profgalloway.com/wewtf https://www.profgalloway.com/wewtf (from Aug 16) https://www.profgalloway.com/wewtf-part-deux https://www.profgalloway.com/wewtf-part-deux (from Sep 20)

xivzgrev 7y ago

Wow I am floored. Given how he had structured the company so favorably toward him, I’m surprised he could put his ego in check for this. Their back must be really against a wall if they don’t raise that $3 billion

drevil-v2 7y ago
I read an article that Adam Neumann has a $700 million line of credit against his WeWork shares and has already drawn down around $550 million of that (to purchase real estate and lease back to We). After the IPO valuation downgrade the banks are now questioning the value of his collateral WeWork shares and could force a margin call. I think this might be driving it.
- mruts 7y ago
  Also he took out credit against his shares to buy even more shares! I guess I can't fault him for believing but it sounds like an unwise move to me.

jld 7y ago

He flew too close to the valuation sun.

misterkgb 7y ago
Too close to the Son?
fullshark 7y ago
Also he's the worst example of these issues so he's being singled out. If there had been another more ridiculous CEO out there doing these shenanigans he would have probably flown under the radar.

CzarnyZiutek 7y ago

why WeWork is a constant source of `NEWS` on HC?

joshpadnick 7y ago

I'm sure I'll get downvoted for this, but I actually just signed up to be a (thankfully month-to-month) WeWork customer for a HotDesk today in Phoenix, and it's actually been a pretty great experience: Great space, nice people, reasonable IT, I was up and running and working within 30 minutes of doing my tour. And yes I've had a cup of the famous We Kombucha. This particular location just opened 3 weeks ago and is apparently already at 70% capacity with a mix of enterprises and startups. Even my Hotdesk membership can't start officially until Oct 1 because they're apparently sold out (though walking around there's plenty of space). Based on these surface observations, the core business at least seems "plausibly profitable". But all the crazy side businesses like co-living just seems like overexpansion to me. I'll politely decline as an investor, but I'm happy to sign up as a lowest-tier, month-to-month customer.

asah 7y ago
Friend reports the same. But hotdesking doesn't support a $10+B valuation.
nikanj 7y ago
There’s a massive jump from plausibly profitable, to a umptillion billion unicorn. Of course re-leasing office space can be profitable, companies have been doing that profitably for decades - if not centuries. But those companies have not received Silicon Valley valuations
vegannet 7y ago
The reason WeWork is great is because investors are subsidising our memberships, just like Uber is cheap because investors are shovelling in cash. WeWork has the potential for profitability if you take away the ridiculousness but the ridiculousness _is_ WeWork: co-working spaces have existed for years, companies like IWG (Regus) offer the same as WeWork and they're profitable... because they don't have a full time bar staff, a live DJ and a skateboard ramp in their lobby. Yes, the new flagship WeWork in London has a skateboard ramp and live DJ in the lobby. When WeWork fails (and their spaces are scooped up by the mature players in the market) the ridiculousness will disappear and we'll be left the same space that has been available all along. I like WeWork, WeWork has value, but ping-pong and baristas don't make for 10x valuations.

ram_rar 7y ago

I am soo glad, that I cancelled my interview with WeWork. I feel bad who bought into the hype recently and joined the company.

bombas 7y ago

My interview with WeWork was for a dev role.. Recruiter emailed me a 'homework' assignment. This homework assignment was basically work they needed to get done and offed it on candidates to finish.. I noped out of that pretty quick.

byeadam 7y ago
Some people are actually ok with this as long as it's not really the work, but similar to the work being done. Good for you that you noped out pretty quick.

mataug 7y ago

I can just imagine Prof Galloway taking victory laps and talking about how the big dog is awesome ! https://www.profgalloway.com/wewtf-part-deux https://www.profgalloway.com/wewtf-part-deux https://twitter.com/JordanBitterman/status/1176549401621348352 https://twitter.com/JordanBitterman/status/11765494016213483...

avs733 7y ago
It never occurred to me just how pretentious/bad the name 'We' is until reading that article... >We will now need additional capital from the private markets, who are no longer under the influence >We has gone from unicorn to distressed asset in 30 days. >In just seven days, We lost more value than the three biggest losers in the S&P 500 have lost in the last year combined: Macy's, Nektar Therapeutics, and Kraft Heinz. I have to pause each time and re-engage my brain to realize he is talking about the company and not himself. I'm significantly enjoying the level to which this fiasco has made investors look like dolts. One can only hope that it does something to pierce the narrative about the possession of capital making people visionary
- mrguyorama 7y ago
  >Kraft Heinz Super off topic but why the heck is Heinz losing so much value?
  - kgbdrop1 7y ago
    You got me curious as well. https://www.nytimes.com/2019/09/24/business/kraft-heinz-food-3g-capital-management.html https://www.nytimes.com/2019/09/24/business/kraft-heinz-food... lists a boatload of issues.
    - deleted 7y ago
      [deleted]
    - spookthesunset 7y ago
      That is just sad. Both of those were staples of childhood... td;lr - Both kraft & heinz were slammed together by a company that bought them both out and then forced them to cut a ton of costs. As it turns out, you can't just cut costs and expect to grow and prosper as the market changes around you. PS - in the article they mention they took away the free office snacks. Taking away perks like that is always a sign that you should head for the exits...

artsyca 7y ago

There are a lot of large and small ironies at play, but the one that irks me the most is the interrelation between `investment` in the financial sense and `investment` in the dress sense, for the word has its root in the word `vestment` which means `clothing` (https://www.etymonline.com/search?q=investment https://www.etymonline.com/search?q=investment) I keep asking myself how startup culture has gone so far off the rails in terms of professional business tropes, even while they court traditional financial backing to the point where the emperor's new clothes scenario is playing out in front of us and we barely even notice? One word: entitlement Could this fellow have stood a chance if he wasn't so nonchalant with his appearance opting for the messianic playboy look rather than the modest preppy techie? I'm sure this comment will get downvoted to oblivion but what are imaginary internet points for if not spending on counterculture opinions? I say the reason this all fell apart is because the guy is simply unlikeable and his shitty entitled-looking Keith Raniere-esque stage presence did nothing to help

artsyca 7y ago
-> A little meme for y'all because it would be so cool to see a guy who calls his company `WeWork` actually wearing a work shirt for once: https://ibb.co/WnFDvfb https://ibb.co/WnFDvfb
dropit_sphere 7y ago
"but what are imaginary internet points for if not spending on counterculture opinions?" Hear hear!

avs733 7y ago

Honestly, this was inevitable. What it makes me wonder long term is who else will be impacted, how it will spread. I can't help but wonder if Musk is next...[0] [0]https://arstechnica.com/tech-policy/2019/09/solarcity-was-insolvent-when-tesla-paid-2-6-billion-to-buy-it-lawsuit-says/ https://arstechnica.com/tech-policy/2019/09/solarcity-was-in...

antoniuschan99 7y ago

From the article lol: Further undercutting his position: eccentric behavior that was detailed in a Journal articlelast week, such as a party-heavy lifestyle that included marijuana use in an airplane and unpredictable management decisions.

SamAbrika 7y ago

Everything stinks in this ponzi scheme company. For those who haven't read it: https://medium.com/@henry.hawksberry/is-we-work-a-fraud-5b78987d3e61 https://medium.com/@henry.hawksberry/is-we-work-a-fraud-5b78...

alexnewman 7y ago

Every 20 years another company takes out long term debts when credit is cheap. It always crashes and it always brings its business partners with them. This should be unlawful and we need gov't organizations to never allow this type of risk to be taken.

qaq 7y ago

Too bad they did not get a chance to start WeInsure and subsidize medical insurance for a lot of people.

byeadam 7y ago

People work for people. Not the company. That said, I've spoken to lots of WeWork employees in the past. If you had a simple job, Adam wanted to know how you could do it faster, or automate it (with you out of work). If you worked on the tech side which seemed to be Ruby on Rails with Bootstrap, well, you were in New York at first, but then Adam would accuse techies of not thinking big enough, or not delivering 5 points worth of features in the time it took 1, and where's the mobile app? The guy knew absolutely nothing about technology, and when he outsourced the reservation system to India, then I knew it really had nothing to do with innovation. What's worse is lots of folks worked there expecting six figures before the outsourcing, but got nickel'd & dimed to something way under six figures. All without a PIP. Edit: removed exact salary amounts because my sources said it would out them.

finphil 7y ago

Not surprised. IMO WeWork is not bad concept, they have built brand-awareness and a solid real-estate portfolio BUT some actors often magnify what the company actually is ...TBC

banglaman 7y ago

Appending ?mod=rsswn to the URL is not bypassing the pay wall anymore

postit 7y ago

I work in one of the companies WeWork acquired. The first time I heard Adan in a townhall I kept wondering, what kind of hell is happening to the world so that guy was sitting in a massive pile of money thanks to VCs. His nonsense and lack of business mindset were evident in every interaction and announcement. So IMHO he deserves that. The issue is that now we have +10k people wondering about their future because they have bills to pay and a hard path ahead. Meanwhile, Galloway brags about how he was right during all this time and suggest massive layouts to save "investors." I'm getting tired of this.

gregjw 7y ago

Timber.

tibbydudeza 7y ago

Up next .. Softbank and their "Vision" fund.