
Is WeWork a Fraud? - AndrewBissell
https://medium.com/@henry.hawksberry/is-we-work-a-fraud-5b78987d3e61
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deogeo
> The earliest shareholders including a gentleman called Mortimer Zuckerman
> were not just their landlords AND seed investors. They also happened to own
> Fast Company and NY Post which were instrumental in propping up WeWork in
> the press before anybody knew who they were. The headlines they spun about
> WeWork’s valuation and ‘meteoric’ rise was basically the shareholders
> advertising their investments. Even Wikipedia’s page (throughout 2015 and
> 2016) introduced WeWork as the ‘most innovative company of 2015’, citing a
> Fast Company article.

Wow. It pays to own the press.

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moltensodium
It's quite amusing how in a week the valuation dropped from $47B to $10B
(-79%) and now it appears it may in fact be worth nothing.

Time to put an end to the ponzi schemes. We all know We is not the only
company that just moves purely on bullshit.

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weare138
Good write up. I always suspected as much but only knew the story behind
WeWork in broad strokes. Needless to say I don't suspect WeWork is a fraud
anymore, now I know it is.

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CyanLite4
Don’t hate the player, hate the game.

Adam swindled billions from SoftBank because SoftBank was running around with
hundreds of billions of dollars (of oil money) burning a hole in their
pockets. And this isn’t the only SV company that’s a Ponzi scheme with no path
to profitability. Just one of the first and largest to get exposed. Couldn’t
have happened to a nicer group of people...

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AndrewBissell
If he had been able to jam the IPO through, Neumann would happily have helped
SoftBank pass the flaming bag of poo to the investing public. So yeah, I'm
going to go ahead and keep hating this player.

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streetcat1
Not more than any other startup.

Startup are valued based on future growth. I.e. most of the value is coming
from long term projections (e.g. 10 years into the future).

So any startup, including wework , is basically selling a growth story. Now,
its up to the investor to decide if the story is correct.

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AndrewBissell
Some startups are profitable from day one. Others have a feasible plan to
reach profitability, even if they never quite make it there.

Still others have no hope of ever becoming profitable, and their creators and
backers know this, but hope to cash out by selling equity in their
fundamentally worthless business at an inflated value through a promotion
scheme. It's this variety that can accurately be termed frauds.

~~~
streetcat1
So, I would not call softbank an uninformed investor. Also, its all a bet.

(It would be a fraud if I present false statements to the investor, but as
long as I show correct statement (even if I am not profitable), then it is up
to the investor to decide)

The fact that a startup is profitable does not affect its value.

Look at Amazon. For a long time it has 0 profitability, and yet, it is one of
the most valuable companies in the world.

Remember that startup or any assets should be valued using cashflow from the
future (DCF). As long as I can show that I will have positive cash flow even
in 10-20 years from now, I can state a value.

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nunchuckninja
All I got from the article was that the term pressi-tutes wasn't carved from
thin air and people really are like that (blodget, ny post)

