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Look at WeWork's "Community-Adjusted EBITDA" for another example of the same thing. In their case, they back-loaded contracts on both sides, leasing and sub-lea
by Benjammer 7y ago
Look at WeWork's "Community-Adjusted EBITDA" for another example of the same thing. In their case, they back-loaded contracts on both sides, leasing and sub-leasing, then amoritized the sub-leasing revenue and didn't amoritize the leasing costs, showing huge positive net income at the start of the leasing terms.
- treis 7y agoThere's a difference between GAAP EBITDA and made up EBITDA. A significantly positive GAAP/actual EBITDA means that the business is long term viable. Existing shareholders and/or creditors might get wiped out, but in the event that happens a viable business should rise from the ashes.
- mbesto 7y agoCommunity-Adjusted EBITDA was an absolute joke when WeWork came out with it. However, I kinda get what WeWork was trying to say, it was just stupid to term it that way. Either way, any analyst worth their salt sniffs that stuff out pretty easy. It's basically a PR attempt for (future) public markets, who have less sophisticated investors.