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> IWG is no longer bigger on revenue given WeWork's far higher growth rate. WeWork can’t afford much more revenue at this rate: WeWork IPO filing shows it's l

by miles 7y ago

> IWG is no longer bigger on revenue given WeWork's far higher growth rate. WeWork can’t afford much more revenue at this rate: WeWork IPO filing shows it's losing nearly $5,200 per customer https://www.cbsnews.com/amp/news/wework-ipo-office-sharing-prospectus-s-1-shows-losses/ https://www.cbsnews.com/amp/news/wework-ipo-office-sharing-p... Whereas IWG actually earns a profit on its revenue: WeWork Is Valued 10 Times Greater Than This Profitable, Public Rival https://www.wsj.com/amp/articles/wework-is-valued-10-times-greater-than-this-profitable-public-rival-11566298801 https://www.wsj.com/amp/articles/wework-is-valued-10-times-g...

ineedasername 7y ago
The argument is that WeWork can stop losing money at nearly any time it wants by halting new facility growth and focusing on filling what it has, as most of it's losses stem from growth projects. At least, that's the theory. It seems we'll get a chance to see what happens when they try and hit the "pivot to profit" button. Maybe they should have, like, a whole bunch of people help them hit that button really hard? Maybe hit it twice, just to be sure.
- pmart123 7y ago
  It’s reasonable to assume if they could have hit a button to demonstrate profitable unit economics or profit in long running spaces, they would have amended the S-1 to show this as the IPO valuation was collapsing.
  - ineedasername 7y ago
    This ability to turn on profitability was decently spelled out in their S-1. It was too late to amend it further to reemphasize the point because investors had already massively soured on the deal and would not take mere assurances at face value. In order to overcome that, WeWork needs to take time, at least a quarter or two, to hit that button and show they're at least on a course to profitability. Before they can get back to IPO land and hope for even a $15 to $20 billion valuation, they need to demonstrate the truth of their statements on turning profitable. Even then I'd place that at the high end of a valuation, 7.5x to 10x revenue is still enormous for a real estate firm

by miles 7y ago

ineedasername 7y ago

The argument is that WeWork can stop losing money at nearly any time it wants by halting new facility growth and focusing on filling what it has, as most of it's losses stem from growth projects. At least, that's the theory. It seems we'll get a chance to see what happens when they try and hit the "pivot to profit" button. Maybe they should have, like, a whole bunch of people help them hit that button really hard? Maybe hit it twice, just to be sure.

pmart123 7y ago
It’s reasonable to assume if they could have hit a button to demonstrate profitable unit economics or profit in long running spaces, they would have amended the S-1 to show this as the IPO valuation was collapsing.
- ineedasername 7y ago
  This ability to turn on profitability was decently spelled out in their S-1. It was too late to amend it further to reemphasize the point because investors had already massively soured on the deal and would not take mere assurances at face value. In order to overcome that, WeWork needs to take time, at least a quarter or two, to hit that button and show they're at least on a course to profitability. Before they can get back to IPO land and hope for even a $15 to $20 billion valuation, they need to demonstrate the truth of their statements on turning profitable. Even then I'd place that at the high end of a valuation, 7.5x to 10x revenue is still enormous for a real estate firm