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WeWork has frittered away $46.7B in value as the stock sinks below ¢50
- AndrewDucker 3y agoIt never had that much value, it just made it look like it did for long enough to get people to invest in it at vastly inflated prices. "Renting offices to work in" was never going to be a silicon valley style success, because it just can't scale that way.
- CPLX 3y agoI mean if it used to be a very large pile of US currency then yes, it definitely had a lot of value that was apparently destroyed.
- fallingknife 3y agoLosing money doesn't destroy wealth. It just transfers it from one place to another.
- CPLX 3y agoNot really. For example there’s a pretty noticeable difference in the amount of wealth a society will have if they choose to build 890,721 intricate snowmen on the island of Manhattan instead of housing, power plants, and infrastructure.
- tourmalinetaco 3y agoI don’t know, I’d say those snow sculptors are pretty wealthy there!
- CPLX 3y agoIn the absence of some sort of external means of support they are dead.
- uoaei 3y agoYou seem to be consistently conflating potential value with real value, but potential value is and always will be a red herring, so it's important to distinguish them and treat them each separately.
- CPLX 3y agoReal value can be destroyed. Dollars can be printed, planes can crash. Crops can grow, or rot. The effort of humans can be deployed wastefuliy, like making snowmen, or not, like planting crops and building shelter. Wealth represents an assessment of the value to humans of existing resources and it can go up and down based on the decisions of how to allocate that wealth. There’s absolutely no controversy whatsoever about this concept despite your desire to not acknowledge it.
- uoaei 3y agoYour response confuses me given my comment. What is your definition of "conflate"?
- shuntress 3y agoPotential future wealth is not "destroyed" when we take actions which do not achieve that potential.
- CPLX 3y agoYes but present wealth is destroyed when resources are deployed unproductively. This concept isn’t particularly subtle or arguable. If you have a lot of food and you are wealthy and then you let it spoil you’re less wealthy. Nobody else got that wealth (assuming you don’t count the microbes) and absent another source of resources then you are also dead.
- bluepizza 3y agoOpportunity cost is a very interesting concept. As you mention, if the wealth doesn't exist, it cannot possibly be destroyed. Why would anyone "leave money on the table" though? Glutting the wealth creation is not fundamentally destructive - what if a specific location cannot actually sustain high production levels because their housing supply, energy supply, or talent supply is insufficient? What if unfettered growth will lead to a collapse that destroys a lot more value than the potential future wealth destroyed? What if a company heavily invests in business and retail construction and a global pandemic happens? Wealth creation is impossible to separate from public policy. For Manhattan to exist, a large amount of money had to be poured into its fundamental blocks.
- deleted 3y ago[deleted]
- gchamonlive 3y agoIf wealth is not destroyed but transferred, where does it go after an earthquake?
- Hamuko 3y agoConstruction companies?
- kibwen 3y ago'The parable of the broken window was introduced by French economist Frédéric Bastiat in his 1850 essay "That Which We See and That Which We Do Not See" ("Ce qu'on voit et ce qu'on ne voit pas") to illustrate why destruction, and the money spent to recover from destruction, is not actually a net benefit to society.' https://en.m.wikipedia.org/wiki/Parable_of_the_broken_window https://en.m.wikipedia.org/wiki/Parable_of_the_broken_window
- bluepizza 3y agoFive years in University and never heard of this essay, not even in passing! Thanks for sharing.
- bluepizza 3y agoWhat if there is no reconstruction? Not every catastrophe is a catalyst for reconstruction. If a house is destroyed in a fire, it loses its value as a house. Now you have the value of the land, which will be offset by the cost of clearing it. So the value of the land is below market. The asset has depreciated. Large scale construction tends to be very good for the economy because it both increases economic activity (construction is expensive, and a lot of people get paid to do a lot of labor in the whole chain, from lamps to concrete to engineers to meal makers), and sets infrastructure that will be used by highly productive companies (white collar offices) to make a lot of money. But there is no value transfer from rubble to construction companies. That asset owner took a hit.
- joosters 3y ago
- bluepizza 3y agoIf you buy a stock for 100 dollars, and due to a series of bad results which led to price adjustments, the stock is now worth 1 dollar, you lost 99 dollars. Nobody else picked up those 99 dollars. Asset depreciation is a fundamental concept that you should be familiar with, as it influences several aspects of your personal finance: https://www.investopedia.com/terms/d/depreciation.asp https://www.investopedia.com/terms/d/depreciation.asp
- UncleEntity 3y ago> Nobody else picked up those 99 dollars. Except the person who sold the stock for $100.
- bluepizza 3y agoPerson A holds 1 stock, valued at 100. Person A sells 1 stock to person B. Now Person A holds 100 in cash, and 0 in assets. Person B now holds 0 in cash, and 100 in assets. Fast forward 5 years. The stock price has crashed to 1 dollar. Person A still holds 100 in cash and 0 in assets. Person B holds 0 in cash, and 1 in assets. There was no transfer of 99 dollars back from Person B to Person A. Person A's holdings were invariant because they don't own the stock anymore. The losses brunt by Person B were not transferred to anybody else. Money doesn't travel back in time.
- mannykannot 3y ago> Money doesn't travel back in time. Correct - the transfer happened when you bought the stock. What you have lost is the expectation of getting it back (or at least the expectation of getting it back today.)
- deleted 3y ago[deleted]
- emacsen 3y agoUnrelated to this is the distinction between money and wealth. The challenge for a company like Weework is that it's hard to identify what wealth they generate- at least for me. In other words, what are they making (goods) or doing (services) that provides value to the world (wealth). I suppose they'd say that their core value is making it easy to rent space quickly. This is certainly providing some value, but I hardly think it's one that's heavily differentiated. I bring this up because the conflation of money and wealth is so often what gets people in trouble. Decoupling the two lets us examine what the value of a company is, at its core.
- yowzadave 3y agoIf I buy a cattle farm, and then the cows all die, where did the wealth go?
- lxgr 3y ago"Losing money" is not the same thing as destruction of value.
- sokoloff 3y agoIt never was a large pile of US currency (at least nowhere near as large as the peak of last_price * shares_outstanding would suggest). If you today form a company having 1 billion and 1 shares and I agree to buy 1 share from you for a dollar, you aren’t a billionaire.
- CPLX 3y agoYes but if you buy the shares from me for $22 billion, as happened here, that’s a little different.
- uoaei 3y agoYeah, finance can be messy for those who just get into it at the smaller to medium scales but who only have some experience in analyzing investments at the micro scales without really understanding the macro scale economics behind it. If the stock market responds to sales by spooking investors who then sell at lower prices, then the market cap was always a scam. Exchange value of the collection of stock shares for the shareholders is actually not last_price * outstanding_shares but a much smaller amount that exponentially decreases as people sell out. The use value for the company too is not represented by market cap because short term speculators aren't going to be around long enough to allow you to realize those investments as assets, and anyway there's a large contingent of shareholders who either don't understand or don't agree on company leadership's decisions, so the true value is much lower than depicted. It's basic economics. Value is what can be done with the set of assets and the collective beliefs held about them, not the projection of such from some pseudo-equilibrium state. However, big finance depends on you either believing their falsehoods or getting out quick enough that the grift is completed so that average Joes are left holding the bag. They're not on your side, so why continue playing by their rules?
- heywhatupboys 3y ago"Taxi services" was never going to be a silicon valley style success, because it just can't scale that way. "Food delivery services" was never going to be a silicon valley style success, because it just can't scale that way.
- Ensorceled 3y agoGood point, those companies are also going to collapse.
- hackernewds 3y agoThey still aren't in a high rate environment
- im3w1l 3y agoI think those are different, because they are frequent small transactions where having a smooth flow is essential. Renting an office is a longer term relationship so a marginal improvement in transaction cost doesn't really move the needle in the same way.
- ghaff 3y agoThose businesses have some shared infrastructure and brand--maybe more than WeWork--but they're still largely city-by-city labor-intensive retail businesses that still can't clearly profitably operate at scale, at least at their current cost structure.
- ape4 3y agoThose services don't own their taxis or bikes.
- Ensorceled 3y agoWeWork doesn't own much of it's property, it leases and rerents.
- LudwigNagasena 3y ago
- belter 3y agoSpecially because those offices were so noisy you could never get any work done. Best places however for finding a date... "What people actually do at WeWork" - https://news.ycombinator.com/item?id=16292423 https://news.ycombinator.com/item?id=16292423
- dkarl 3y agoCoworking in general is a hideous working environment. The offices are fishbowls. There's no privacy. It's worse than open plan offices, because at least at the office, everybody works for the same company. The only times I've found decent coworking spaces, they've been ad-hoc affairs to make use of an old building on cheap real estate. No software startups, nobody chasing VC money, no espresso machines, no free snacks (or maybe just a few sad granola bars for emergencies), just a solid wooden door, wifi, and natural light from a window. I don't think arrangements like that last, though.
- sidewndr46 3y agoOne of the founders I worked for mentioned that all of his businesses actually started in the corner of a real-estate office. They just rented a few desks to work from, then whenever they grew they moved up to a small lease.
- marcosdumay 3y agoThere is a cowoking place well hidden near my home. It has 3 quite passable conference rooms, 6 "working bays" where you can use with a laptop in a very uncomfortable way, and a free desk at the side of those bays. It looks like the perfect place to do a meeting and go away, and indeed it looks like people do use it that way a lot. Also, you can rent it at the moment, without any planning. I imagine it's successful. It is indeed not the kind of place you want to go to do quiet work. But spaces leading to quiet work are plentiful anyway.
- nunez 3y agoWeWork's private offices were fantastic though. I had one for about a year during COVID. It was amazing while we had it.
- adhesive_wombat 3y ago> It never had that much value, it just made it look like it did for long enough to get people to invest in it at vastly inflated prices. A lot of "Silicon Valley success" fits this model too.
- rwmj 3y agoNot to mention that the business had already been done. It's Regus with nice sofas.
- BulgarianIdiot 3y agoExplain why. It’s literally Uber for offices. It could’ve worked if managed right.
- AndrewDucker 3y agoUber has made losses every year, and only works because it is supported by VC money: https://fourweekmba.com/uber-losses-by-year/ https://fourweekmba.com/uber-losses-by-year/
- Marazan 3y agoYes, exactly like Uber. "Mini-cab firm" is not a SV success story either.
- f6v 3y agoI bet you could come up with bullshit like: “WeWork is a platform! We can also do food delivery and sell other add-ons…”. Saudi investors would be delighted five years ago.
- laratied 3y agoI am pretty sure "WeWork is a platform" was actually something they pitched. Or maybe it was WeWork as a service. WeWork labs was the most genius thing though. Build a tech lab straight up for no other reason than to have a tech lab for the optics of having a tech lab.
- malermeister 3y agoUber isn't exactly financially viable, either.
- EliRivers 3y agoIs it Uber for offices? Uber's model is that individual people with cars and spare time effectively loan out that car and their time to people wishing to make journeys, with the two parties being connected and the deal arranged by Uber, who take a cut. All the vehicle ownership risk was shoved onto the driver, and in the event that there was suddenly zero demand somewhere, that risk also was borne by the driver (at least, until various jurisdictions started enforcing minimum wage so that drivers who had no rides all day still got paid). WeWork's model didn't appear to involve individual people with spare office capacity loaning it out for short periods to other people needing an office for a short while. WeWork's model appeared to be that WeWork itself leased office space, and rented it out to people. WeWork paid for the lease, and took on all the risk of that and all the risk of the demand vanishing.
- kgwgk 3y agoIt never had that much value but it has taken $22 billion of perfectly valuable money and set it on fire: "WeWork has raised a total of $22.2B in funding over 23 rounds." https://www.crunchbase.com/organization/wework/investor_financials https://www.crunchbase.com/organization/wework/investor_fina...
- javajosh 3y agoIn fairness they must have spent at least $10B on truly amazing interior design and designers. At least, I hope so. In earnest, I've never seen a bad WeWork interior, and I'm glad those folks got the work.
- YurgenJurgensen 3y agoSurely if they owned $10B in valuable property that’d be reflected in the value of the company. So spending that much on not terribly liquid assets is lighting the money on fire from their creditors perspective if they’re not paying for themselves.
- pessimizer 3y agoI'm sure that plenty of that $22B came from the sale of other inflated assets to buy into WeWork. WeWork isn't the only scam out there; the economy seems largely dominated by scams (things whose values are determined by their moment by moment success in hyping bullshit) and cons (things that make money by providing services enabling the hyping of bullshit.)
- kelipso 3y agoFinancialized economy, no manufacturing base, etc etc. Don't want to doomer I guess, but the land has plenty of resources and educated people so recovery wouldn't be too difficult.
- jfengel 3y agoWas anything of value lost? The idea, as I understand it, was co-working spaces. They were there to optimize that, extracting the maximum profit in the way they leased stuff. Ok, fine. Is co-working still going on? Has something desirable been lost? Were they creating any value that couldn't be recreated by someone else. I can't care one way or another about fake valuation of market cap. But I do care if work is getting done, and that people are trying to find new ways to do it. So can someone tell me if there is a there there or if this is just very rich people complaining that they didn't get richer?
- paulcole 3y agoIf WeWork goes out of business and closes down, many people will lose their jobs and many people will lose the place where they work. That seems like something of value will be lost. Yes, coworking is still going on for many sole proprietors, small teams, and remote workers. Remote work does not mean work from home.
- sokoloff 3y agoIt’ll be replaced with other short-term, small commitment office space leasing providers. Some will surely be less efficient, meaning more people are employed in total. Coworking will continue even as the providers of it come and go.
- rlpb 3y ago> If WeWork goes out of business and closes down, many people will lose their jobs and many people will lose the place where they work. Why? Assets don't usually just vanish; they merely change hands. The spaces will physically be there. If an individual space is viable and has existing customers then the creditors will sell it to someone who will likely continue to run it. If it is not viable then it will go, but then it's hard to argue it had value.
- paulcole 3y ago[flagged]
- jarym 3y agoYes its a huge value loss but isn't this part of the VC model - invest in some companies knowing most will probably whither away in one way or another but a few will hit it out the park? The article mentions Benchmark and Insight have done ok in their other investments. Softbank though is a bit of an outlier - maybe it was a one-hit-wonder with Alibaba. They don't appear to have invested like other VCs at any rate.
- lettergram 3y agoVCs largely get out before these events. They are likely up tbh
- polygamous_bat 3y agoOne new theory is that the new VC model, as postulated in Venture Predation [0] is to create the illusion of potential to success so that you can dump your shares on the market at a sky high price. After that, VCs don't care if the company loses $50B in value, they already had their exit. [0] https://news.ycombinator.com/item?id=36003096 https://news.ycombinator.com/item?id=36003096
- Mistletoe 3y agoI don’t even think that is new, it is the oldest play in the book. We see it in crypto and stock IPOs constantly. Sell early tiers of shares to insiders at very discounted rates, dump on the plebs when it is listed on exchanges at several multiples of the price you bought in at that think they are getting a good deal early. You bought shares at 0.25 and it launches at $10 and keeps going down to $5, $2 but you just don’t care because even at the lows you are 4x’ing your money. People say no value was lost with WeWork but that is very untrue. Hard working, misguided people and funds bought WeWork stock from the SPAC and let Adam Neumann turn lies and smokescreens into real cash. He’s no different than Elizabeth Holmes from Theranos except her lies involved something that can be proved was incorrect since it was medical testing. His real estate ideas were equally wrong and impossible. His net worth is now 2.2 billion.
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- deleted 3y ago[deleted]
- lvl102 3y agoThank goodness it never made it public (first time around). Can you imagine the capital destruction for pension funds?
- pcurve 3y agoIt still managed to destroy $25billion the second time around, so I would say plenty of damage has been done. Shame of the investors for giving this sky high valuation through SPAC.
- voakbasda 3y agoI imagine the only shame the investors feel is that they couldn’t pump up the share price higher, so they got an even bigger windfall before screwing over everyone that would be left holding the bag.
- lvl102 3y agoI find it very convenient for the Fed to have kept QE while inflation was flashing red hot just so Wall Street could finish making money off of all these SPAC deals. Only when Wall Street finished, did Fed magically come to senses with inflation. Whole thing is rigged.
- shp0ngle 3y agoI'm not sure if you are ironic or not. What's bad about pension funds? People need, you know, to live off something when they are old. The old model "we have a lot of kids and they will take care of us" no longer works as people have no kids...
- the_mitsuhiko 3y agoI find it hilarious, that IWG now has three times the market cap of We. I remember the days on HN when the sentiment was that Regus was done for.
- diceduckmonk 3y agoI think the market cap is less than the amount Adam walked away with.
- Hamuko 3y agoElizabeth Holmes should've picked an easier industry than healthcare considering Adam Neumann was selling hot air and made out like a fucking thief.
- CPLX 3y agoIn Adam’s defense he created what’s actually an excellent product. I’m a happy WeWork customer it’s a great experience as a customer. Things would be a lot different for Holmes if that’s what she did.
- dchftcs 3y agoGiven their losses your rent would have to roughly double for WeWork to have any profit. May I know if the services provided to you are worth that much?
- CPLX 3y agoYes probably. Also that’s not the only variable in the equation it seems likely there’s at least one expense that could be cut.
- Marazan 3y agoWell my company sells ten dollar bills for 5 dollars. Our customers love it even more.
- fuzzfactor 3y ago>I’m a happy WeWork customer it’s a great experience as a customer. >Things would be a lot different for Holmes if that’s what she did. I think you're correct. If Holmes would have actually had an excellent product or happy customers, Wework gives an idea of the much bigger scale of fraud that could have been accomplished.
- mensetmanusman 3y agoImagine funding 100 companies with $500M...
- fuzzfactor 3y ago>Imagine funding 100 companies with $500M... If there was no greed involved whatsoever, and all were providing actual value added, odds are there would be more than one skyrocketing to beyond unicorn status, fully sustainable for the forseeable future. Without further investment, just respectable returns.
- peter_retief 3y agoI find it unbelievable, this is not the first time.
- dotcoma 3y agoAnd it won’t be the last.
- pcurve 3y ago"He's back with a new startup that raised $350 million from the VC giant Andreessen Horowitz in August, 2022 — its biggest check ever " Someone once said, SV values bigger failures than small success. Fail big.
- kibwen 3y agoAnd most importantly, fail upward. The fact that this legendary con man has ultimately suffered no consequences for his actions demonstrates how the market is fatally irrational.
- boeingUH60 3y agoThe VCs backing him are in on the con to. They want to pump and dump their stake on the real market. SoftBank was the real con person in the WeWork saga…Neumann just left them holding the bag, and they couldn’t successfully dump it on retail investors or sell it to a greater fool. The reason VCs continue to back people like Neumann is they have succeeded many times (e.g, Uber, Postmates, Lyft, Chamath Palihapitiya’s SPACs, etc.).
- bombcar 3y agoVCs see WeWork as a massive success, and blame SoftBank from not exiting correctly. They know they would do better.
- fuzzfactor 3y agoCharlatans gonna charlatate.
- panick21_ 3y agoThe economic concept of market rationality was never that the market is always rational in all cases, but that overall people make rational choice on avg.
- acomjean 3y agoIt’s a shame they bought (and sold) meetup.com. A great place for clubs in the before times for a small fee. The sold it, but I don’t think it’s the same.
- nunez 3y agoWhat's a bigger shame is that Meetup can't seem to succeed on their own. (I think they were on their Series F when WeWork bought them.) They are one of the few remaining vestiges of the "old" pre-social media Internet and are successful in getting people together without walled gardens.
- gigatexal 3y agoAnd Neumann gamed SoftBank for 1B. Amazing. The amount of grift at the highest eschelons of business is hilarious.
- floehopper 3y ago> the Venture Predator constructs a pile of shit so large and impressive that investors are convinced that there must be a pony under there somewhere https://pluralistic.net/2023/05/19/fake-it-till-you-make-it/ https://pluralistic.net/2023/05/19/fake-it-till-you-make-it/
- shp0ngle 3y ago"value"
- lefstathiou 3y agoI’ve ridden this stock down almost all the way (came in at $5 then 2.50 then again at $0.50). I am a pretty bad investor in that my top criteria is to buy stocks that produce a good or service I love and then stick with them a long time. As an operator WeWork adds so much value to us as we staff up all over the world. I love being able to go into any city and have a fun energetic and aesthetically beautiful environment. When I look at the WFH shift, I struggle to rationalize how companies wouldn’t rather utilize flex space as needed for group huddles than commit to long term leases. Their pricing is variable which is inflation resistant. Top line growing at 20% and they removed $2bn in run rate expenses. The list goes on… Anyway I was wrong on literally every account. This was a huge (and expensive) lesson for me. Stocks always have room to go down no matter how low you came in at.
- ericmcer 3y agoBut surely now at .21…
- lefstathiou 3y agoBelieve me… the thought has crossed my mind!
- giraffe_lady 3y ago> When I look at the WFH shift, I struggle to rationalize how companies wouldn’t rather utilize flex space as needed for group huddles than commit to long term leases. It still requires that everyone be in the same city more or less. Basically only applies to companies that had an office and now don't want one, and even then only for a while. Once you're working fully remote anyway you're giving up one of its major advantages (geographically unconstrained hiring pool) by keeping to one city like that. If you find meeting in person to be advantageous enough to justify that, you probably should capitalize on it and just have an office. It's one of those things that sounds good on paper, and kinda was good during some periods of the pandemic. But it's a compromised middle ground that realizes none of the advantages of committing to either approach.
- bombcar 3y ago
- boeingUH60 3y agoI’m still amazed that Adam Neumann squandered $18 billion in raw cash…that’s almost my country’s annual budget!
- bombcar 3y agoWeWork buying a small country would have been amusing, if disastrous for said country.
- tinyhouse 3y agoI wanted to love the concept but couldn't really. I couldn't afford renting a whole office so just had the cheap day pass that lets you use the facility. It's like going to a cafe with the benefit of leaving your laptop while you go to the bathroom or wonder around. Nothing like an office. I want a dedicated desk and office chair, external keyboard and monitor, a quiet area, conference rooms that don't charge you by the minute, etc. We Work is nothing like that.
- deleted 3y ago[deleted]
- xyst 3y agoWeWork has always been a shitty REIT marketed and valued as a tech company. Not surprised at its demise. The only thing I’m sad about is: Neumann is not rotting in jail. He defrauded investors, misled people yet he was actually rewarded with a golden parachute. Per article he is now pushing some other junk product with rental housing. Probably buying up distressed properties, applying cheap aesthetic fixes, and jacking up the prices and pushing out people from their homes.
- bombcar 3y agoIt’s not even an REIT. If they had purchased the properties instead of long term leases they might be able to transition into an REIT and slurp up real estate on the cheap. But that’s boring and not investable.
- rjbwork 3y agoThe crack dealer of real estate. Poorly run and insanely overvalued in the first place because they somehow convinced people they were a tech company. Pretty unsurprising.
- SilverBirch 3y agoThis was always the weird thing about WeWork, after the collapse of it's ridiculous valuation people were like "Well, it's still a business, similar to IWG, it has some value". But the truth is no, the only thing WeWork had was a series of liabilities. They had signed a bunch of agreements to rent office space long term at a high price. The valuable part of IWG is that they have rental agreements with buildings that are low cost and they rent that space out to businesses for more money. That's how they make money. But WeWork didn't have that, at best they had expensive leases they needed to walk away from and some potential customer demand that is elastic enough that it'd go to 0 when they started charging above their own costs. The article makes out like WeWork lost 47Bn over the last 5 years. No! It was probably worth 0 when the first IPO blew up. The only thing that kept it alive was Japanese face saving.
- ilrwbwrkhv 3y agoWhat is crazy to me is that Adam Neumann came out of this thing about a billion dollars richer. Now he is with Marc Andreessen (another hokey) in Saudi raising more money for the next hot air balloon. What a delightful grift.
- wahnfrieden 3y agoHe worked hard for it! lmao edit: to be serious... there's certainly a lot of difficulty in achieving what he did no matter the failure, but when we use the word work to compare an employee worker and a ceo owner, let's be more specific with what we mean. we all understand work here and we talk about its structures day in day out. a ceo's day to day work has you running memeified mental contortions to understand how it translates into customer or employee value. their duties have more to do with the operations and growth of a business in a competitive landscape. this isn't "work to produce", it's work to manage and grow an organization's marginal returns and to seek monopolization in market in various ways as far as the law permits. I personally don't have the same casual respect for these two categories of work in terms of their social worth and am skeptical when people talk of them as equally comparable when talking about things like respectability, social good, whose participation is necessary to produce something, etc
- wwarner 3y agoCo-working could be a great place for people to meet people working on interesting ideas. If WeWork had focused on producing great collaborations, it really would have been a game changer.
- 1letterunixname 3y agoScaling the organic is an intractable problem. "Collaboration" by forcing employees back into the office doesn't work either.
- daniel-cussen 3y ago[dead]
- quags 3y agoThis model is probably workable, but more under a airbnb type model where other people hold the liabilities and rent over a platform. The parent (ie wework) would take a cut, and companies could lease excess space over the platform. Instead wework holds the liabilities, which they got at high values, and now can not rent them. There was a long bull run, and money was flowing at many types of different projects - many which have or will end up failing. It is the same cycle as in the past which really shows itself after a few years of the run where suddenly it seems bear markets can't happen again, dumb ideas are making money and if you are not in you are loosing out. Covid led to work from home, which really killed wework's concept, but if it wasn't covid it would have eventually run out because it didn't make any money.
- AlbertCory 3y ago> He's back with a new startup that raised $350 million from the VC giant Andreessen Horowitz in August, 2022 — its biggest check ever — and is back on the tech-speaker circuit. smh. This really sets a new standard in grift. Now, if he only had good kompromat on all those investors, he'd be up there with Jeffrey Epstein. Come to think of it...
- colineartheta 3y agoFunny, this is what I thought as well. To be a conspiratorial…he has to have SOMETHING on all of these VCs.
- awaythrow483 3y agoWe work scammed about 40b+ in price that never existed as value. They frittered the rest
- NotYourLawyer 3y agoStartup unicorn valuations were overinflated. Neumann just found a clever way to short that market. Good trade.
- WrtCdEvrydy 3y agoWeWork proved the Theory of the Bigger Fool in the stock market.
- mjmsmith 3y ago"Well obviously there will be a Harvard Business School case study about WeWork, but what will it say? What is the lesson? It’s a good lesson, right? A lot of kids starting at Harvard Business School next fall will be hanging up posters of Adam Neumann in their dorm rooms. Neumann, the founder of WeWork, will walk away from this corporate bonfire with a billion dollars and a bunch of fancy houses. His great-grandchildren will be prominent philanthropists with their names on museums and universities, the strange origin of their fortunes long forgotten. Neumann did a certain sort of capitalism—one with some cachet at HBS!—as well as anyone has ever done it. It is one thing to build a successful company that creates a lot of value and take some of that value for yourself; Neumann created a company that destroyed value at a blistering pace and nonetheless extracted a billion dollars for himself. He lit $10 billion of SoftBank’s money on fire and then went back to them and demanded a 10% commission. What an absolute legend." -- https://www.bloomberg.com/opinion/articles/2019-10-23/how-do-you-like-we-now https://www.bloomberg.com/opinion/articles/2019-10-23/how-do...
- more_corn 3y agoWework never had that value. It was all smoke and mirrors destined for a fall. The value was obviously irrational from the start. A better headline might be “irrational exuberance surrounding wework finally fades and the cold light of reality shines on their stock price”
- a1371 3y agoDue to life events, I started looking for a new office for our team last week. I had always considered WeWork to be too hip for my taste. So when a colleague suggested it, I thought they were joking. But they weren't and it actually wasn't a bad idea. Good location, nice interior, "flexible" plans. What I found thought is that buying these flexible plans is very clunky. For example, I wanted to try things out at first by getting hot desks for 5 people for a day. Installed their app and realized that I can book for only myself. Their support said that every employee must download the app and purchase their own hot desk. This is extremely stupid! I am not going to ask the team to pay for their office and then reimburse them. The best solution I have is to make 5 accounts on the phones that I have access to. So here I am with a service of theirs that I want to get, but they don't care enough to sell it to me.
- joeconway 3y agoCompanies can pay for wework all access subscriptions and issue them to individuals
- a1371 3y agoThe price of their all access is 2x other spaces. Their pay as you go makes sense for our volume of use and what I tell you has been our experience.
- nunez 3y agoI was surprised by how poor the app was. Having used it as an individual on someone else's plan, it was fairly decent. Using it as an account owner? Different story!
- CottonMcKnight 3y agoI wonder about a connection between the collapse in commercial real estate and the recent flood of editorials, news segments, interviews, public statements, tweets, etc., railing against Work-from-Home. It feels like a lot of investor-class losses are on the verge of being realized, and they are getting desperate.
- bradlys 3y agoI mean, come on. Almost all growth stocks have been completely hammered in the last 18 months. Nearly every SPAC is down monstrously from its merger. All the hyper growth IPOs have dropped to a quarter of their ATH - with many startups not even going public now. (Stripe, Instacart, etc.) Nearly everything got hammered. WeWork is just one of hundreds. Admittedly, they’re the poster child for this economic situation.
- nunez 3y agoI don't understand why so many people are dunking on Neumann. Yes, he is the male Gwyneth Paltrow, and that is annoying. But IMO WeWork is an awesome product that was executed really well, and Neumann's tech-bro spin to it was a big driver behind that (and Softbank sinking billions into them). Every office was (and still is) in really cool locations and tastefully designed top to bottom. The community teams were usually hip and super friendly, and the offices themselves were really well thought out, both in appearances and in function. Many say "but Regus did it first." Sure. Have you _actually been_ in a Regus property? More often than not, they look like doctor's office waiting rooms from the 80s! Also, did they even have an all-access pass system like WeWork did? Being able to hotdesk in another city anywhere in the world was super awesome. Sure, WeWork was seeped in debt. But as far as I understand it, that's pretty much every real estate company! If WeWork wasn't managed like a fucking coke-addled rave, I think they wouldn't be where they are. I had friends who worked there, and the incompetence they described was off the charts crazy.
- 1letterunixname 3y agoEmperor's new clothes + gold rush = dotcom(N.0). WeWork wasn't materially differentiated from Regus. That should clue in any investor on how to approach it. These days, there is likely a greater opportunity for "Airbnb-for-coworking" at scale due to layoffs and slack in commercial real-estate occupancy. The main issue is integrating compatible identification and access control to ease badging. There are very few environments or situations where anything crucially secret ever occurs, and a peer vouching system and background check process should be enough to screen "is this person sane and not going to disrespect or disrupt the space?".