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Adam Neumann is the most brilliant, but perhaps somewhat repulsive, [not short] seller of the unicorn bubble. People sometimes incorrectly assume that the prop

Adam Neumann is the most brilliant, but perhaps somewhat repulsive, [not short] seller of the unicorn bubble. People sometimes incorrectly assume that the proper way to benefit from overpriced assets is to sell them short. Truth is that any selling will suffice! Housing bubble? Build more houses, sell. Corporate credit bubble? Start a corporation, get credit. Tech unicorn valuation bubble? You got it, create a stupid startup, pay yourself huge salary and sell your stock on private markets. Bottom line is that supply follows demand - if there is demand then supply will materialize. This is the "magic" of capitalism. It's no different with WeWork, which is a consequence of investors chasing outsized returns in a low return environment. Matt Levine's column on the topic (scroll to "We We We"): https://www.bloomberg.com/opinion/articles/2019-10-02/the-trades-will-be-free-now https://www.bloomberg.com/opinion/articles/2019-10-02/the-tr... And if you don't believe that this is caused by chasing crazy returns see this interview with Masayoshi Son about how he secured $45B in 45 minutes from the Saudi prince (1:05). He said he wants to give him a $1T gift: https://youtu.be/Sa2_VBu0d7k https://youtu.be/Sa2_VBu0d7k Congratulations, this is a Michael Burry level of play. But not as "pure".

jjeaff 7y ago
I think the jury is still out on whether Nueman comes out ahead on this deal overall. He did some self dealing and got a bloated salary, but it also seems that much of his loans and stock sales were reinvested into wework.
- paxys 7y ago
  Neumann invested a big chunk of his money in real estate, so he should be good regardless.
Gibbon1 7y ago
My feeling is when you refuse to limit yourself to the one true and golden measure of inflation (basically cat food, toilet paper, and very sketchy imputed rents) and look at differential inflation. Becomes really obvious, there inflation in stock prices that isn't supported by any real economic growth. Makes sense then that if you can create bullshit stocks out of thin air and push them onto the market with all the other bullshit inflated stocks. Then you can make a lot of coin. Especially if you can get investors to swallow tech company valuations[1]. [1] Go ahead try and value any tech company as if it were a ordinary company. I dare you.
- thesausageking 7y ago
  > Go ahead try and value any tech company as if it were a ordinary company. I dare you. ok. Let's look at Apple compared with three non-tech F10: PE Yield PEG EV/EBITDA AAPL 19 1.35% 2.0 14 WMT 23 1.77% 5.3 13 BRK 19 0.00% 0.86 10 MCK 9 1.23% 1.27 8 Looks like it's priced right; if anything it's cheap.
  - vtange 7y ago
    "Any tech company" was probably an overstatement, companies like Apple and Google are much more grounded in valuation compared to companies like Amazon, which had a PE ratio of 85.99 in 2018 [0]. [0] https://www.nasdaq.com/market-activity/stocks/amzn/price-earnings-peg-ratios https://www.nasdaq.com/market-activity/stocks/amzn/price-ear...
    - paxys 7y ago
      So...all tech companies are overvalued as long as you exclude the ones that are correctly valued?
    - pbreit 7y ago
      But PE is obviously the wrong metric for Amazon since we know it reinvests all its earnings and has proven ability to convert investment into cash flow.
      - throwaway2048 7y ago
        Or maybe it isn't? And the plan of theirs isn't going to result in huge profits, ever.
        dodobirdlord 7y ago
        Seems unlikely, it's not as though their core business lines are unprofitable.

jjeaff 7y ago

I think the jury is still out on whether Nueman comes out ahead on this deal overall. He did some self dealing and got a bloated salary, but it also seems that much of his loans and stock sales were reinvested into wework.

paxys 7y ago
Neumann invested a big chunk of his money in real estate, so he should be good regardless.

Gibbon1 7y ago

My feeling is when you refuse to limit yourself to the one true and golden measure of inflation (basically cat food, toilet paper, and very sketchy imputed rents) and look at differential inflation. Becomes really obvious, there inflation in stock prices that isn't supported by any real economic growth. Makes sense then that if you can create bullshit stocks out of thin air and push them onto the market with all the other bullshit inflated stocks. Then you can make a lot of coin. Especially if you can get investors to swallow tech company valuations[1]. [1] Go ahead try and value any tech company as if it were a ordinary company. I dare you.

thesausageking 7y ago
> Go ahead try and value any tech company as if it were a ordinary company. I dare you. ok. Let's look at Apple compared with three non-tech F10: PE Yield PEG EV/EBITDA AAPL 19 1.35% 2.0 14 WMT 23 1.77% 5.3 13 BRK 19 0.00% 0.86 10 MCK 9 1.23% 1.27 8 Looks like it's priced right; if anything it's cheap.
- vtange 7y ago
  "Any tech company" was probably an overstatement, companies like Apple and Google are much more grounded in valuation compared to companies like Amazon, which had a PE ratio of 85.99 in 2018 [0]. [0] https://www.nasdaq.com/market-activity/stocks/amzn/price-earnings-peg-ratios https://www.nasdaq.com/market-activity/stocks/amzn/price-ear...
  - paxys 7y ago
    So...all tech companies are overvalued as long as you exclude the ones that are correctly valued?
  - pbreit 7y ago
    But PE is obviously the wrong metric for Amazon since we know it reinvests all its earnings and has proven ability to convert investment into cash flow.
    - throwaway2048 7y ago
      Or maybe it isn't? And the plan of theirs isn't going to result in huge profits, ever.
      - dodobirdlord 7y ago
        Seems unlikely, it's not as though their core business lines are unprofitable.