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I have only read the related party section in the WeWork IPO filing so far, and I am not kidding that it is THE MOST BANANAS THING I HAVE EVER READ.
I'm old enough to remember when private company CEOs refraining from doing interviews when their companies were preparing for an IPO.
axios.com/wework-disclos…
axios.com/wework-disclos…
Risk factor:
I found it hard to put into words how shook I feel after reading the WeWork IPO. But I tried:
bloomberg.com/opinion/articl…
bloomberg.com/opinion/articl…
The economics don't seem great, and the structure of this company is complicated and unusually influenced by a single person. I've never seen a unicorn that is so unicorn to extreme.
On just about every page was something that made me say, out loud to no one, "UM, WHAT?"
This is from my actual notes:
This is from my actual notes:
I get the allure. The commercial office industry is huge, fragmented and stodgy.
But look at WeWork's revenue from existing buildings, which barely covers its reported costs from those buildings. Losses are not only from expansion. The unit economics aren't great right now.
But look at WeWork's revenue from existing buildings, which barely covers its reported costs from those buildings. Losses are not only from expansion. The unit economics aren't great right now.
The corporate structure is a thicket, and the intricate links between SoftBank, WeWork and the CEO are...something. The company seems to realize it needs to explain the interlocking ties:
This is a company with a short operating history, bleeding cash, a governance structure that favors one person above all others, meh unit economics, a history of questionable spending and an obligation to pay nearly $50 billion (!) in lease payments in coming years.
But sure, the growth.
Also a word to the SEC: What is up, guys? Both WeWork and Uber IPO filings are littered with customized metrics that are explained, but also ???
Is it justified, really, to have run rate revenue? Or "contribution margin excluding non-cash GAAP straight-line lease cost”
Is it justified, really, to have run rate revenue? Or "contribution margin excluding non-cash GAAP straight-line lease cost”
This makes me long for the innocent days of Groupon and its "adjusted consolidated segment operating income."
And I am not exaggerating when i say I cannot WAIT to read the SEC comment letters on WeWork's draft IPO filings. Like, if I had a beach vacation planned, I would print out those letters to read as I dug my toes in the sand.
Anyway, I look forward to reading the stories and takes from people who know about the real estate business, because this is not a tech company and why are people like me writing about this company?
