
Wework loses $5200/customer, lost $1.3B in H1/2019 - artsandsci
https://boingboing.net/2019/08/15/more-than-uber.html
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situational87
The pattern has been established clearly with Uber. All the investors need to
get paid off, so force the IPO.

Doesn't matter if there is zero profit and no plans to make profit long or
short term. Gotta have our exit! The exit is the only thing that matters
anymore.

It's appalling that the IPO market has been subverted into a blatant open air
scam that our government deems perfectly legal and acceptable.

It's despicable and makes me ashamed to work in tech. The whole shell game
around who actually owns the shares and controls things through multiple
complicated legal entities is just another huge red flag. When this all blows
up the only winners will be armies of lawyers who untangle this mess.

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travisoneill1
The entire point of investment is to sell for more than you buy, so yes, the
exit is, and always has been the only thing that matters. And your accusation
that it is a scam is just not true. A scam requires deception and where is
your evidence of that?

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cryptica
They're fraudulently exploiting a low interest rate environment by taking huge
risks on behalf of other people and diverting responsibility away from
themselves when things go belly up. Investors and executives take massive
loans on behalf of the companies that they control, companies go out of
business, investors and executives walk away with the money, creditors lose
and value creators lose (because they can't compete in this unnatural zero-
margin competitive environment which these fraudulent investors and executives
have created).

Also, many big corporations and public companies sell their stock to 401K and
Superanuation funds which hold the retirement funds of regular working people
who have little control over these funds. People in many countries are forced
to pay a percentage of their income into these funds which then essentially
hand over the money to corporations to spend on fraudulent acquisitions.

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travisoneill1
Where is the fraud? Creditors are very aware of the interest rate environment
and still chose to make the loans. Are you saying that Wework lied to
creditors to obtain the loans? Because that would have to be true for it to be
fraud. Investors and executives are allowed to take risks on behalf of the
company because it is literally their company.

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cryptica
Just as one example, Wework is at least partially funded by Softbank which is
a fund backed by the Saudi Public Investment fund. The Saudi Public Investment
Fund is controlled by the Saudi government using regular Saudi people's
retirement money, often without their explicit knowledge.

If you pick any big startup which is losing a lot of money, it will likely be
backed in a large part by public money; either through a national public fund
or a superannuation or 401K fund. Money which was invested on behalf of
regular people was taken from their retirement accounts which they were often
legally obliged to contribute a percentage of their income to. For example,
even in a progressive country like Australia, people are forced to contribute
12% of their income to a superannuation fund; the process is intentionally
complicated to coerce people into choosing between a small number of large
funds.

It's fraud on a massive scale because the responsibility for the crime is
highly divided such that any single act on its own is not a crime; they are
only criminal when taken together and if you assume that everyone involved
knew what they were doing.

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zaroth
Hate on WeWork all you like, but this is a shoddy article and a shoddy metric.

Their losses divided by their number of customers might equal $5,200, but that
tells us roughly nothing. Maybe they have found a way to print money so they
are growing aggressively?

I'd much rather meaningful metrics showing how awful WeWork actually is, than
vanity metrics.

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brink
> The company plans to lost $2.7b in 2019 overall.

This article is like 5 sentences. They couldn't bother to read it twice before
posting?

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black6
> They lose more money per customer than any other, even world-beating-loser
> Uber.

Any other _what_? It's like a poorly written tweet of an article.

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crimsonalucard
With Uber tightening it's hires, the housing market slump and this... is the
bubble beginning to pop?

All we need is for one big, big event to occur.

~~~
kahnjw
Add to that investor pessimism driving bond yields down or inverting them, a
trade war, bad global growth numbers, and investors sucking every last penny
out of the stock market while there is still time. That's all you need for a
downturn.

That said I'm not predicting a huge downturn. As long as there is some
political correction back towards the center or left, which there usually is
after a downturn, they'll be driving the Dow to 35k+ in no time. History
repeats itself.

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klinskyc
The $5200 customer is somewhat meaningless, because WeWork customers spend a
lot more with WeWork than Uber or Chewy custotmers do. Would be more
interesting to see as a percentage.

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jbob2000
WeWork is a real estate investment company masquerading as a work space
company. As long as real estate continues to provide big returns, I don't
think Wework will ever care about losing money on customers.

Big money is investing in WeWork because its set up to swallow real estate all
over the world. If you had buckets of cash and wanted to do this yourself, it
would be really difficult and time consuming.

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blatchcorn
Good. We don't need businesses like WeWork, we need non-for-profit collectives
and incubators

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intopieces
Why not? What makes this particular use case not suitable for profit?

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tiborsaas
Maybe they are making not so smart decisions with their locations? I've seen
two WeWork places close to each other in the heart of London's financial
district.

They could rent a huge warehouse on the edge of the city centre, but that
would attract probably a different audience they aim for.

If they generate $1.3B loss with those prices[0] then how they see a way to
make a profit? It's not like self driving coffee machines will save them :)

I don't get it.

[0][https://www.wework.com/buildings/5-merchant-square--
london](https://www.wework.com/buildings/5-merchant-square--london)

~~~
intopieces
Businesses make dumb decisions all the time, it doesn’t mean their business
model isn’t suitable, in some moral sense, for profit.

Unless I am misreading the comment?

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jakozaur
The We Company got inflated financial model.

However, the mentioned metric dollars lost per customer is a vanity metric. It
does not mean much. E.g. Wework earns several times more than Uber per
customer. It seems there are more upfront cost to fitout the new office vs.
find a driver contractor.

