
WeWork to List Shares on Nasdaq, Make Governance Changes - dawhizkid
https://www.wsj.com/articles/wework-to-list-shares-on-nasdaq-make-governance-changes-11568348421?mod=rsswn
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vadym909
I can guess (however unlikely it may be) how Uber might some day make money
through its monopoly power or use of autonomous cars and justify its
valuation. I just can't imagine how WeWork could continue growing and turn a
profit if it can't do it in this booming economy. The freelancers and small
businesses that use it are likely the first to end their memberships and work
from home or coffee shops.

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kelnos
From what I've read, the WeWork locations in their mature markets are
profitable, but they've been investing heavily in new/immature markets.
Despite We's bizarre straddle between being a real estate company and trying
to be a tech company, it's a fairly standard growth play: burn money now in
order to gain more market share over time.

If they wanted to, they could slow down on new purchases/rentals/construction
and likely become profitable without too much trouble. But that would of
course be at the expense of growth.

Not saying they're a great company or that they deserve a crazy high
valuation, but suggesting that they're unprofitable because they have a bad
business model is missing the whole picture.

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egdod
Their income stream is month-to-month and can disappear quickly in an economic
slowdown. Their lease liabilities have a timescale of years.

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wwthrowaway
As an ex-employee I am indifferent to WW’s success or failure, but to set a
few things straight, very few of their members are on month to month deals.
The larger deals they do for corporates are often multi-year commitments.

As long as a sophisticated large corporate sees a net benefit of being in a
wework they will stay.

As an analogy, everyone knows running servers on AWS is more expensive per
unit of compute than running your own hardware, however, there is a genuine
value for a company to hand off the running of an office space (and the
capital investment on buildout) to a third party in exchange for predictable
monthly opex.

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Huxley-Luke
I don't understand the hype around WeWork. Nothing it does is innovative or
different. Its strategy and product can be easily replicated by anyone with
enough cash to burn. It seems less like a business and more like a rent-
seeking scam to loot money from investors until they've sold to the greatest
fool they can find.

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danpalmer
I think the very fact that we’re talking about it proves they are innovative,
but I’d argue the innovation isn’t quite what they’d like to think it is.

This market is a tough one, with much competition. The fact we’re discussing
this at all shows that they’ve managed to grow to become a recognisable name.
Even if that’s just because of tons of VC cash, at least the VCs thought them
worthy of investment.

Why? I think it’s a cultural change. Existing players market to companies,
WeWork markets essentially to employees, it markets to the person who actually
goes into the office and sits there every day, rather than to the balance
sheet.

With their flexibility on leases, they pass the bar of cheap enough for the
business considerations and do well enough for people’s minds, but with the
trendy design, nice kitchens, beer on tap, plants, and effortless meeting room
AV they appeal to people’s hearts. No one else does this. Is it worth it?
Maybe, maybe not, we’ll find out in the long term.

This is innovative, and this creates meaningful hype. I believe they’ve got
more right than you may be giving them credit for. Is it a long term business?
Probably not this alone, there are loads of issues with WeWork as a business.
I wouldn’t touch the stock.

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jpeg_hero
> speeds up preparations for its hotly anticipated initial public offering in
> the face of tepid interest from investors.

God, tell me the editor was asleep. Tell me how it can both be “hotly
anticipated” yet with “tepid interest.”

Brain hurts.

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xmprt
I think it makes perfect sense. I'm in both categories. I excited for it
because it's probably going to be the biggest flop of the year (more than
Uber/Lyft). Tepid interest from people buying into the IPO.

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jarym
WeWork are quite expensive - enough that startups will get their own offices
when they reach some stability. So I’m left wondering, WeWork charge a lot and
in turn they pay a huge premium for their building leases. How are they NOT
making money?

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nprateem
They're a bad investment because they're riddled with debt. They've taken out
long-term leases on properties that they're liable for. In a downturn their
customers will probably vanish leaving them with their liabilities. Plus, they
don't really have a moat. So all in all, it seems like the founder is doing
anything possible to cash out before the house of cards comes crashing down.

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paxys
"Sweeping changes" is mentioned in the first line of the article but nowhere
else. What exactly are they planning to change?

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ganitarashid
[https://en.m.wikipedia.org/wiki/Greater_fool_theory](https://en.m.wikipedia.org/wiki/Greater_fool_theory)

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wwthrowaway
Converting a capital intensive and inflexible office lease commitment to
monthly payments and the ability to scale is very useful to many companies
that manage their real estate prudently.

WW could be successful without all the rah-rah about changing the world. Like
Uber, I’m sure they could afford to shed a few thousand employees (who were
hired for growth) and continue to run a more sustainable business.

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skinnymuch
Sustainable as in much more low key and not trying to grow a lot? How would
that sit with investors? No less Softbank’s $9B investment into it and 30%
ownership.

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wwthrowaway
Sustainable in the sense of better managing the 500+ locations they’ve already
got and easing off the ridiculous growth for a while.

I don’t see Softbank have the option to continue feeding capital into the
company so they might need to reassess their end-game with this investment.
The alternative is possibly a spectacular crash into bankruptcy.

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jannes
> We waited an unusually long time to decide on an exchange.

Sentences like these make skimming pretty hard. It made me re-read the entire
article because I was confused about the who is the author.

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amoitnga
From a point of view of a regular human, how is WeWork good for me?

I'm generally opposed to 1 company to "rule them all", and I would like to see
giants to be broken down.

In case of say, Amazon, at the very least being so huge may allow (arguably)
for cheaper prices and almost everything in one place, delivered conveniently.
suppose that's true.

How one company owning a lot of real estate is good for me? The way I see it,
if they are successful, they will spend less while charging more, even further
accumulating wealth among the smaller amount of ppl. I don't see how it's good
for most of us.

They aren't developing real estate market. They aren't creating new ways of
building more efficiently. They aren't doing anything other than using huge
sums of money to generate more money.

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hisnameismanuel
Just as AWS made it easy to spin up a server, WeWork is making it easy to spin
up a desk. This matters for companies with teams scattered around the world.
If there's a WeWork in a certain city, it's super easy for us to get our team
onboarded there - the brand is consistent, we know our people are going to be
comfortable and happy.

Say what you will about their ridiculous financials, the product itself is
good.

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amoitnga
Being able to rent a desk is very convenient, true.

But I don't think comparison to aws is fair. AWS can be scaled.

Renting out part of the office won't benefit in any way from the same company
having offices in multiple cities.

Do you think, one landlord, owning offices in 10 cities be more efficient
(better) than 10 separate landlords?

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hisnameismanuel
Thanks for the thought. I'm not concerned with the efficiency of their
business - I'm concerned with the efficiency of _my_ company. WeWork has
removed a big headache for us.

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GoodGOYIM
Congratulations WeWork! Remember: Haters gonna hate.

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swarnie_
Please come back and post your position on IPO day so we can all have a good
laugh.

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quaquaqua1
In their defense, FB IPO was an epic fail that eventually turned out to be a
good price

