4 ms·

WeWork Raises ‘Substantial Doubt’ About Staying in Business

69 points by coloneltcb 3y ago

mydriasis 3y ago
https://archive.is/UY4X7 https://archive.is/UY4X7
system16 3y ago
This is so surprisingly candid I don’t think it can be interpreted as anything other than “complete certainty” they will no longer be in business.
- toomuchtodo 3y ago
  Every WeWork story about impending failure reminds me of this Matt Levine piece: https://archive.li/2X0oO https://archive.li/2X0oO Start at “Son: What does your company do?”
  - YuriNiyazov 3y ago
    Such a classic. I read it the first time it came out, and I re-read it every time someone links to it. Thanks.
  - Obscurity4340 3y ago
    I read this in a much more amusing way before I read the article.
paulgb 3y ago
Direct link to the 10-Q where they make the statement: https://www.sec.gov/ix?doc=/Archives/edgar/data/0001813756/000181375623000059/we-20230630.htm https://www.sec.gov/ix?doc=/Archives/edgar/data/0001813756/0...
- ttymck 3y ago
  Liquidity and Going Concern: > As a result of our losses and our projected cash needs, which have been impacted by the recent increases in member churn, combined with our current liquidity level, substantial doubt exists about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is contingent upon successful execution of management’s intended plan over the next twelve months to improve the Company’s liquidity and profitability, which includes, without limitation:
nforgerit 3y ago
Last time I was searching for an office in Berlin, I remember some shady sales tactics (without remembering details) and a totally overpriced offer. Made me skip them. But take it with a grain of salt, I’m German and might just not be used to US “sales stunts”.
- marcopicentini 3y ago
  Me too in Milan. For 1 month they asked 3x monthly rent if paying with bank wire
- 3LazTjBv-f 3y ago
  I mean people always called out WeWork as just another intermediary, with no value added (besides cost overhead). And they somehow wanted to be called an "tech" company. Even before pandemics it was called risky when they long-term rented multiple office building, for above average prices.
  - omarfarooq 3y ago
    Imagine if they just used the 20 billion raised to buy the buildings instead.
__derek__ 3y ago
Less than two years ago, Adam Neumann was taking credit for the WeWork turnaround and SPAC merger.[1] Will he also claim credit now? It's not as though the problems are novel: > As a result of our losses and our projected cash needs, which have been impacted by the recent increases in member churn, combined with our current liquidity level, substantial doubt exists about the Company’s ability to continue as a going concern over the next 12 months. The same could have been written in the IPO filing. [1]: https://www.youtube.com/watch?v=Dgp-CM-gQik https://www.youtube.com/watch?v=Dgp-CM-gQik
Simorgh 3y ago
I personally enjoy using WeWork, the offices are miles beyond anything I’ve seen in the corporate world, in terms of decor, style and design. They’re not particularly social, however. I’d honestly expect them to be able to ticket networking events, for the actual members. I’d probably be interested in attending, it’s not that easy to find or meet professionals in the same city, with similar interests…
- breatheoften 3y ago
  I also tend to enjoy the spaces / service ... it seems like could be a bit short sighted of commercial real estate loan holders to let it shutter ... seems like a consortium of lenders with commercial real estate holdings could/should take it over and use it as a management service to try and shave their losses on all the vacant commercial office space that's gonna be everywhere ... it's not like there's really anything more valuable they can do with that space in the foreseeable future ...
  - j33zusjuice 3y ago
    They could do the exact same thing as wework without absorbing their debts, though.
RcouF1uZ4gsC 3y ago
At this point, I have nothing but awe for Adam Neumann. Someone who can extract that kind of money for WeWork and still manage to stay on the legal side of the line is brilliant. Seems like a true Hacker to me.
- Spooky23 3y ago
  I started off thinking the guy was a tool. But over time, the awe developed. The dude is a living cartoon character, but still managed to find a way to pull off his thing.
- ldjkfkdsjnv 3y ago
  Yeah this was a brilliant business move by him.
- happytiger 3y ago
  He put a tech wrapper around real estate and absolutely fleeced high-status investors across the globe until he himself joined the billionaire crowd. If you want to look up to that, that’s your prerogative. I reserve respect for people who make value and create innovation and not just repackage conventional business practices and sell it to the investor class (more common than it should be). I mean I respect the salesmanship, but in terms of creating value for the world, whether WW happened or it didn’t happen few people will care in a few years — it didn’t change the world or make anyone lives better… so was it really “successful” or did it just redistribute a lot of investor capital using clever decks and expensive real estate? I mean ra ra Adam Neumann — good for you dude. But if there’s a business that makes a difference in the world or matters to the course of anybody in the long term, WW probably isn’t on many people’s list.
  - speakfreely 3y ago
    > it didn’t change the world or make anyone lives better… Now he's got the wealth for a more impactful next chapter. Trying to get fabulously wealthy is difficult enough; trying to do that while having a major impact on the world is even more difficult. Not saying his second act will necessarily be great, but at least he's got a platform to work from now.
gregsadetsky 3y ago
Months ago, so many WeWorks around New York (where they have multiple dozens of locations, many spanning multiple floors) seemed quite, if not completely, empty. Especially the closed / private offices that they rent to companies - those just seemed dead. It seemed so wasteful and “obvious” that it couldn’t last? The amenities they offer are pretty great, it’s comfortable, and there will definitely be less choice in terms of flexible places to work out of if they go under. This all reminds me - I co-ran a small coworking space many years ago. Our first “good” year was making $18 in profit. We celebrated our non-losses because it was a big deal… it’s a really tough business to be in.
arpowers 3y ago
This is more of a “CRE is overpriced” issue than a WeWork issue. Likely they will use bankruptcy or a complete restructuring (perhaps w re-brand) and use it to renegotiate leases
senttoschool 3y ago
Spoke to a few traditional office sales people and asked them about WeWork. All of them said the WeWork model was never going to work. WeWork caters to startups/small companies and individuals. This group of customers has the least amount of money to spend and is the most unstable. In addition, WeWork's average floor plan has way too much space not being used for desks. Contrast WeWork with a traditional office real estate company such as Regus. Traditional offices use nearly every inch of the floor plan for desks. They cater to profitable businesses or build custom floor plans for large corporates. The $/space and stability of these profitable businesses is what makes Regus profitable while WeWork never made any money. Anyways, I'm sad to see WeWork go. They converted VC money to nice offices affordable to startups and individuals. That era is ending now.

69 points by coloneltcb 3y ago

https://archive.is/UY4X7 https://archive.is/UY4X7

This is so surprisingly candid I don’t think it can be interpreted as anything other than “complete certainty” they will no longer be in business.

toomuchtodo 3y ago
Every WeWork story about impending failure reminds me of this Matt Levine piece: https://archive.li/2X0oO https://archive.li/2X0oO Start at “Son: What does your company do?”
- YuriNiyazov 3y ago
  Such a classic. I read it the first time it came out, and I re-read it every time someone links to it. Thanks.
- Obscurity4340 3y ago
  I read this in a much more amusing way before I read the article.

paulgb 3y ago

Direct link to the 10-Q where they make the statement: https://www.sec.gov/ix?doc=/Archives/edgar/data/0001813756/000181375623000059/we-20230630.htm https://www.sec.gov/ix?doc=/Archives/edgar/data/0001813756/0...

ttymck 3y ago
Liquidity and Going Concern: > As a result of our losses and our projected cash needs, which have been impacted by the recent increases in member churn, combined with our current liquidity level, substantial doubt exists about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is contingent upon successful execution of management’s intended plan over the next twelve months to improve the Company’s liquidity and profitability, which includes, without limitation:

nforgerit 3y ago

Last time I was searching for an office in Berlin, I remember some shady sales tactics (without remembering details) and a totally overpriced offer. Made me skip them. But take it with a grain of salt, I’m German and might just not be used to US “sales stunts”.

marcopicentini 3y ago
Me too in Milan. For 1 month they asked 3x monthly rent if paying with bank wire
3LazTjBv-f 3y ago
I mean people always called out WeWork as just another intermediary, with no value added (besides cost overhead). And they somehow wanted to be called an "tech" company. Even before pandemics it was called risky when they long-term rented multiple office building, for above average prices.
- omarfarooq 3y ago
  Imagine if they just used the 20 billion raised to buy the buildings instead.

__derek__ 3y ago

Less than two years ago, Adam Neumann was taking credit for the WeWork turnaround and SPAC merger.[1] Will he also claim credit now? It's not as though the problems are novel: > As a result of our losses and our projected cash needs, which have been impacted by the recent increases in member churn, combined with our current liquidity level, substantial doubt exists about the Company’s ability to continue as a going concern over the next 12 months. The same could have been written in the IPO filing. [1]: https://www.youtube.com/watch?v=Dgp-CM-gQik https://www.youtube.com/watch?v=Dgp-CM-gQik

Simorgh 3y ago

I personally enjoy using WeWork, the offices are miles beyond anything I’ve seen in the corporate world, in terms of decor, style and design. They’re not particularly social, however. I’d honestly expect them to be able to ticket networking events, for the actual members. I’d probably be interested in attending, it’s not that easy to find or meet professionals in the same city, with similar interests…

breatheoften 3y ago
I also tend to enjoy the spaces / service ... it seems like could be a bit short sighted of commercial real estate loan holders to let it shutter ... seems like a consortium of lenders with commercial real estate holdings could/should take it over and use it as a management service to try and shave their losses on all the vacant commercial office space that's gonna be everywhere ... it's not like there's really anything more valuable they can do with that space in the foreseeable future ...
- j33zusjuice 3y ago
  They could do the exact same thing as wework without absorbing their debts, though.

RcouF1uZ4gsC 3y ago

At this point, I have nothing but awe for Adam Neumann. Someone who can extract that kind of money for WeWork and still manage to stay on the legal side of the line is brilliant. Seems like a true Hacker to me.

Spooky23 3y ago
I started off thinking the guy was a tool. But over time, the awe developed. The dude is a living cartoon character, but still managed to find a way to pull off his thing.
ldjkfkdsjnv 3y ago
Yeah this was a brilliant business move by him.
happytiger 3y ago
He put a tech wrapper around real estate and absolutely fleeced high-status investors across the globe until he himself joined the billionaire crowd. If you want to look up to that, that’s your prerogative. I reserve respect for people who make value and create innovation and not just repackage conventional business practices and sell it to the investor class (more common than it should be). I mean I respect the salesmanship, but in terms of creating value for the world, whether WW happened or it didn’t happen few people will care in a few years — it didn’t change the world or make anyone lives better… so was it really “successful” or did it just redistribute a lot of investor capital using clever decks and expensive real estate? I mean ra ra Adam Neumann — good for you dude. But if there’s a business that makes a difference in the world or matters to the course of anybody in the long term, WW probably isn’t on many people’s list.
- speakfreely 3y ago
  > it didn’t change the world or make anyone lives better… Now he's got the wealth for a more impactful next chapter. Trying to get fabulously wealthy is difficult enough; trying to do that while having a major impact on the world is even more difficult. Not saying his second act will necessarily be great, but at least he's got a platform to work from now.

gregsadetsky 3y ago

Months ago, so many WeWorks around New York (where they have multiple dozens of locations, many spanning multiple floors) seemed quite, if not completely, empty. Especially the closed / private offices that they rent to companies - those just seemed dead. It seemed so wasteful and “obvious” that it couldn’t last? The amenities they offer are pretty great, it’s comfortable, and there will definitely be less choice in terms of flexible places to work out of if they go under. This all reminds me - I co-ran a small coworking space many years ago. Our first “good” year was making $18 in profit. We celebrated our non-losses because it was a big deal… it’s a really tough business to be in.

arpowers 3y ago

This is more of a “CRE is overpriced” issue than a WeWork issue. Likely they will use bankruptcy or a complete restructuring (perhaps w re-brand) and use it to renegotiate leases

senttoschool 3y ago

Spoke to a few traditional office sales people and asked them about WeWork. All of them said the WeWork model was never going to work. WeWork caters to startups/small companies and individuals. This group of customers has the least amount of money to spend and is the most unstable. In addition, WeWork's average floor plan has way too much space not being used for desks. Contrast WeWork with a traditional office real estate company such as Regus. Traditional offices use nearly every inch of the floor plan for desks. They cater to profitable businesses or build custom floor plans for large corporates. The $/space and stability of these profitable businesses is what makes Regus profitable while WeWork never made any money. Anyways, I'm sad to see WeWork go. They converted VC money to nice offices affordable to startups and individuals. That era is ending now.