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In order for something to be fraud there has to be deception. This was never the case with WeWork.

by harryh 7y ago

deleted 7y ago
[deleted]
Hongwei 7y ago
I think the shenanigans they were pulling (crazy governance, conflicts of interest enriching the founder and wife, bad acquisitions) were obvious to the HN and analyst community, but possibly they hoped it would be over the heads of retail investors. Now obviously, in this case, it was too blatant and stunk bad enough that even retail investors shied away.
- harryh 7y ago
  The vast majority of shares purchased at IPOs are by institutional investors writing very large checks, not retail investors. Retail investors shying away had nothing to do with the IPO getting pulled. And even if this wasn't the case it's still not fraud: if retail investors have all the data (which they did) but still want to buy something, it's not deception.
- xkcd-sucks 7y ago
  Most of the ethical red flags seem to be identical to municipal government corruption, e.g. enriching family members and giving contracts to companies one owns. It's been going on for hundreds of years, you'd think retail investors would be wise at this point
- fullshark 7y ago
  Well speaking for myself it was obvious to me, but it was NOT obvious it wouldn't work. A lot of companies had successful IPOs with those issues.
e12e 7y ago
Isn't the most basic fraud to advertise fraud? My Google fu fails me, but in general I seem to recall the absolute most common con is to "recruit" people for a made up con (essentially: if you give me 1k we can defraud this mark for 100k and share the profit (the con obviously being that your partner simply pockets the 1k))?
nebulous1 7y ago
If SoftBank had to do creative accounting to value it at $47 billion in January in order to support the IPO price (and thus increase the value of their existing investment) then that might be fraud. I haven't seen anybody suggest that such evidence exists though.
paulddraper 7y ago
> In order for something to be fraud there has to be deception. Not "fraud" in technical sense; more like "generous marketing". Running an ad of a bunch of thin, attractive people drinking Coke is not fraud. It's also not very accurate either.
ganitarashid 7y ago
Whether there was deception and therefore fraud will likely be determined in a court of law, by a jury.
mola 7y ago
Masquerading as a tech company is deception. Pumping up valuation is deception.

In order for something to be fraud there has to be deception. This was never the case with WeWork.

by harryh 7y ago

In order for something to be fraud there has to be deception. This was never the case with WeWork.

deleted 7y ago

[deleted]

Hongwei 7y ago

I think the shenanigans they were pulling (crazy governance, conflicts of interest enriching the founder and wife, bad acquisitions) were obvious to the HN and analyst community, but possibly they hoped it would be over the heads of retail investors. Now obviously, in this case, it was too blatant and stunk bad enough that even retail investors shied away.

harryh 7y ago
The vast majority of shares purchased at IPOs are by institutional investors writing very large checks, not retail investors. Retail investors shying away had nothing to do with the IPO getting pulled. And even if this wasn't the case it's still not fraud: if retail investors have all the data (which they did) but still want to buy something, it's not deception.
xkcd-sucks 7y ago
Most of the ethical red flags seem to be identical to municipal government corruption, e.g. enriching family members and giving contracts to companies one owns. It's been going on for hundreds of years, you'd think retail investors would be wise at this point
fullshark 7y ago
Well speaking for myself it was obvious to me, but it was NOT obvious it wouldn't work. A lot of companies had successful IPOs with those issues.

e12e 7y ago

Isn't the most basic fraud to advertise fraud? My Google fu fails me, but in general I seem to recall the absolute most common con is to "recruit" people for a made up con (essentially: if you give me 1k we can defraud this mark for 100k and share the profit (the con obviously being that your partner simply pockets the 1k))?

nebulous1 7y ago

If SoftBank had to do creative accounting to value it at $47 billion in January in order to support the IPO price (and thus increase the value of their existing investment) then that might be fraud. I haven't seen anybody suggest that such evidence exists though.

paulddraper 7y ago

> In order for something to be fraud there has to be deception. Not "fraud" in technical sense; more like "generous marketing". Running an ad of a bunch of thin, attractive people drinking Coke is not fraud. It's also not very accurate either.

ganitarashid 7y ago

Whether there was deception and therefore fraud will likely be determined in a court of law, by a jury.

mola 7y ago

Masquerading as a tech company is deception. Pumping up valuation is deception.