WeWork - end of irrational exuberance

[JuanDB]

WeWork seems to have become the poster child for inflated valuations at IPO following beyond, Lyft, Uber etc. In addition the labyrinthine corporate structure and IP agreements have come under criticism as these seem to load the dice against those investing post IPO towards the founder and early investors.

Interesting to read the valuation at IPO may be more than halved https://www.theguardian.com/business/2019/sep/05/wework-shares-ipo-value-halved

Personally I can’t see past WeWork being a real estate company focussing in office space letting. I’m sure they have some smart technology to manage scheduling and occupancy but enough to be considered a “tech” company?

One for braver / smarter folks than I.

Cheers,

Juan.

[Alaric]

Personally I can’t see past WeWork being a real estate company focussing in office space letting.

Also it's one that doesn't seem capable of operating at a profit. Selling stuff at a loss is usually a good way of increasing volumes.

[JuanDB]

Great point.

Applying market share grabbing SaaS commercial models makes perfect sense for cloud technology providers when CaC is much lower than LTV. It makes no sense where the cost of sales rises closely in proportion to unit sales.

Unless they maybe have a smart "bunk desk" model to up the density and make the unit economics work?

Juan.

[toofast2live]

Reminds me of the heady dot com boom. Anyone remember this one. A few rich boys get together to do “something but not sure what” and the market went wham bam here’s 750m valuation.

https://www.independent.co.uk/news/busi ... 23357.html

Twerps. I was with broker killik at the time. They successfully decimated (literally) my portfolio.

[Spet0789]

Reminds me of the heady dot com boom. Anyone remember this one. A few rich boys get together to do “something but not sure what” and the market went wham bam here’s 750m valuation.

https://www.independent.co.uk/news/busi ... 23357.html

Twerps. I was with broker killik at the time. They successfully decimated (literally) my portfolio.

Decimation is 1/10 so 10% down. That would be a stellar performance in the tech crash. I guess you mean 9/10.

[johnhemming]

I think the same issues rest with Uber as with WeWork.

[JuanDB]

I think the same issues rest with Uber as with WeWork.

Entirely agree. I’ve thought for some time that the profits of Uber are largely the depreciation and future maintenance costs that the drivers will bear, extracted and transferred to Uber.

If these companies could combine their undoubtedly smart technologies with honest and fair commercial models they could be a force for good. As it stands they seem utterly destructive and unsustainable.