Thread by @KailashConcepts

1/21 Let's talk about $WE. Last month @SeekingAlpha reported that WeWork could declare bankruptcy in 2023. They have a $ problem.

loom.ly/roQICwI twitter.com/i/web/status/1…

2/21 Their analysis of WeWork's failed business model is spot on.

"The problem for $WE is the margin between what they pay and what they receive from their #customers has not been enough to cover the very large administrative/marketing/advertising #expenses."

3/21 Their story is wild. WeWork was founded in 2010. By 2014, it "the fastest-growing lessee of new #office space in New York" and was on track to become "the fastest-growing lessee [lessor] of new space in America."

4/21 At that time, they had some big-name investors 👉🏼 #JPMorgan, #GoldmanSachs, and the former #ceo of #BostonProperties, to name a few.

5/21 In Feb of 2015, $WE was named to Fast Company’s 50 Most Innovative #Companies list, and by March of the following year, they raised $430 million in financing from Legend Holdings and Hony Capital, valuing the company at $16 billion.

loom.ly/FJK7TuM

6/21 In June 2016, $WE laid off 7% of its staff. The following month, they fired and sued Joanna Strange, an employee who leaked information to the press that showed that WeWork would miss its #financialgoals.

7/21 This @Reuters article gives all the deets, including an interesting quote from the #ceo at the time...

loom.ly/6KZrVIk

8/21 ...Chief Executive Officer and co-founder Adam Neumann told employees in meetings on May 9 and May 23 that the company had to rein in costs and get its finances in order.

Remember, this is SEVEN YEARS AGO.

9/21 That's when things REALLY got chaotic. In 2017, they opened a luxury health spa, expanded into Asia, invested in #Wing & WaveGarden, acquired @Meetup for a cool $156m, and founded a private school called WeGrow...

10/21 That same year $WE raised $4.4b from the SoftBank Vision Fund at a #valuation of approximately $20b.

11/21 $WE aquisitions in 2018 ⬇
Conductor for $120m
Naked Hub for $400m
MissionU for $4 (in stock)
Teem for $100m

Think that was enough spending?

12/21 $WE also purchased a business jet for $60m to fly Adam #Neumann around to tell stories. *cough* We mean, conduct business? They lost over $2b total in 2018 when all was said and done.

13/21 In 2019, @BusinessInsider #reported that $WE was losing $219,000 every hour of every day. 😲

loom.ly/LBrUpog

14/21 $WE aquisitions in 2019 ⬇
Managed by Q for $220m
Spacious for $42.5m

That's when enough was enough, and Neumann was ousted as #ceo; they sold the business jet, laid off 20% of its global workforce, and delayed their plan to go public.

15/21 In 2020, they announced plans for a slower growth rate and began phasing out free beer at all North American co-working locations. Yes, you read that correctly. Free beer + coworking = an HR nightmare waiting to happen?

16/21 They went public in 2021: "WeWork has agreed to #gopublic via a SPAC merger. The deal values it at $9 billion, less than a quarter of its 2019 valuation."

loom.ly/3WtoUrM

17/21 The same year, @hulu released a documentary about $WE. "How do you lose $47 billion in six weeks? Let us count the ways"

18/21 The news of $WEs potential bankruptcy in the present day should come as no surprise. It isn't surprising to us.

19/21 In our recent #whitepaper we dug deep into the "biggest burners" and asked: What if some of the biggest growth darlings from the prior bubble were really just relentless cash burners with tremendous downside risk to still-bloated valuations?

loom.ly/0w_9qtY

20/21 The last three years have largely been characterized by rock-bottom #interestrates, epic government largess, and the highest profit margins in 100 years

If these companies could not generate cash #profits in the last three years, when will they?

21/21 It's 101 bro: "Business must be run at a profit, else it will die." -Henry Ford