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(CNBC)   Last year, WeWork was valued at $47 billion. At year-end, it was down to $7.3 billion. Today? $2.9 billion   (cnbc.com) divider line
    More: Fail, Discounted cash flow, Free cash flow, SoftBank Founder, Masayoshi Son, SoftBank, Cash flow, Vision Fund portfolio companies, SoftBank Mobile  
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432 clicks; posted to Business » on 19 May 2020 at 7:57 AM (8 weeks ago)   |   Favorite    |   share:  Share on Twitter share via Email Share on Facebook



33 Comments     (+0 »)
 
View Voting Results: Smartest and Funniest
 
2020-05-18 9:44:33 PM  
Pretty sure it's worth Jack S*it.
 
2020-05-18 9:46:30 PM  
Awwwww. That's too bad.

*sad trombone*
 
2020-05-18 9:52:29 PM  
$2.9B?

That sounds about $10B too high
 
2020-05-18 10:10:37 PM  
We Work.....wayyyy over there... at home.
 
2020-05-18 10:53:33 PM  
TheyBroke (tm)
 
2020-05-18 11:09:04 PM  
Softbank lost $18 billion of Saudi and Emirati money on this and other crazed unicorn plays in the last year.

So......good news really.
 
433 [TotalFark] [BareFark]
2020-05-19 4:08:58 AM  
The people behind Pets.com must be losing their goddamned minds every farking day.
 
2020-05-19 5:41:59 AM  

433: The people behind Pets.com must be losing their goddamned minds every farking day.


Webvan would like a word...
 
2020-05-19 5:45:59 AM  
Unfortunately no lessons will be learned here. Softbank will blame it on COVID-19 instead of acknowledging that WeWork was a ludicrous scam, and they fell for it. Consequently, they will do. the same thing with the next one that comes along. Given their track record, it's a bit of a miracle that Softbank still exists. A cynic might begin to suspect that the whole thing is an elaborate money-laundering scam.

CSB: I was offered a job at Softbank, many years ago. I turned it down because I knew I could not muster the requisite levels of wide-eyed credulity and uncritical thinking.
 
2020-05-19 8:07:47 AM  
Some of these startups look an awful lot like pump and dump schemes.
 
2020-05-19 8:14:34 AM  
Wow! American commercial real estate is overvalued, so.. repetitive....
 
2020-05-19 8:26:25 AM  

HugeMistake: Unfortunately no lessons will be learned here. Softbank will blame it on COVID-19 instead of acknowledging that WeWork was a ludicrous scam, and they fell for it.


Are they really going to ignore a solid year of "Adam whatshisname is a giant self-dealing fraud" and claim that it's COVID that killed their entirely stupid "rent office space for less than we paid, and we'll eventually make money!" business?

// easiest way to wind up with a billion dollars? start with $2B, and let venture capitalists "dream big"
 
hej
2020-05-19 8:50:18 AM  
Still one or two zeros too many.
 
2020-05-19 8:55:23 AM  

433: The people behind Pets.com must be losing their goddamned minds every farking day.


Pets.com does something useful.
 
2020-05-19 9:05:44 AM  
I watched a YouTube vid about WeWork a couple of weeks ago and even after I couldn't figure out how exactly the company came to be valued the way it was.
The vid explained 'how' it happened but the 'why' of the way money starts to behave at that level is something I cant wrap my head around.
 
2020-05-19 9:10:42 AM  

HugeMistake: Unfortunately no lessons will be learned here. Softbank will blame it on COVID-19 instead of acknowledging that WeWork was a ludicrous scam, and they fell for it. Consequently, they will do. the same thing with the next one that comes along. Given their track record, it's a bit of a miracle that Softbank still exists. A cynic might begin to suspect that the whole thing is an elaborate money-laundering scam.

CSB: I was offered a job at Softbank, many years ago. I turned it down because I knew I could not muster the requisite levels of wide-eyed credulity and uncritical thinking.


Softbank is who turned this into such a huge lossmaker. They took a guy with a moderate dream with small potential and told him that if he expanded it tenfold or a hundredfold they'd fund him. They also were big in backing Uber early on, the dream of abolishing private car ownership worldwide with one monopolistic source of rides was one that resonated because SoftBank's CEO is a farking idiot when it comes to evaluating potential.
 
2020-05-19 9:14:59 AM  

FunkJunkie: I watched a YouTube vid about WeWork a couple of weeks ago and even after I couldn't figure out how exactly the company came to be valued the way it was.
The vid explained 'how' it happened but the 'why' of the way money starts to behave at that level is something I cant wrap my head around.


Somehow wework ended up on the tech startup track where valuations at the highest levels are basically operating under the assumption your company will become a monopoly like amazon or facebook or google. Obviously theres a lot more friction when your monopoly entirely depends on acquiring vast amounts of real estate
 
2020-05-19 9:51:14 AM  
Too bad they didn't go public before Covid happened.

If they had, their stock would probably be like 500 bucks a share and climbing based on the past couple market's performance.
 
2020-05-19 10:11:14 AM  
There is a freaking reason why tech bros suck at industries that require massive capital fixed costs.
 
2020-05-19 10:13:21 AM  

Rhyno45: Pretty sure it's worth Jack S*it.


Probably negative, given the long-term leases it is locked into.

VC don't seem to understand the basic differences between software companies that can grow with very little additional costs and physical product companies where growth and costs are in a virtual lockstep.
 
2020-05-19 10:17:42 AM  

FunkJunkie: I watched a YouTube vid about WeWork a couple of weeks ago and even after I couldn't figure out how exactly the company came to be valued the way it was.
The vid explained 'how' it happened but the 'why' of the way money starts to behave at that level is something I cant wrap my head around.


The way startups determine valuation is crazy. It has absolutely zero to do with the company and is completely dependent of how good you are at talking people out of money. If I talk a friend into investing $1,000 in exchange for 10% of the company, then the company is worth 10,000. If that friend is super rich, and is willing to give me $100,000 for 10% of the company, then the company is worth $1M. Doesn't matter what the company does.
 
2020-05-19 10:21:35 AM  

This text is now purple: 433: The people behind Pets.com must be losing their goddamned minds every farking day.

Pets.com does something useful.


Fark user imageView Full Size


The business model of buying pet supplies online eventually worked out, too.
 
2020-05-19 10:22:07 AM  
It's fun to watch all the supposedly really smart rich people chase unicorns like Uber, WeWork and Theranos, and then get totally burned when these houses of cards collapse.
 
2020-05-19 10:43:17 AM  

Mad_Radhu: This text is now purple: 433: The people behind Pets.com must be losing their goddamned minds every farking day.

Pets.com does something useful.

[Fark user image 371x233]

The business model of buying pet supplies online eventually worked out, too.


Sure it has.  Chewy is even more unprofitable than pets.com.

Fark user imageView Full Size
 
2020-05-19 11:55:00 AM  

HugeMistake: 433: The people behind Pets.com must be losing their goddamned minds every farking day.

Webvan would like a word...


Yeah, back then, it was a scandal that they lost a BILLION DOLLARS*

*pinkie to corner of mouth.
 
2020-05-19 11:56:58 AM  

Target Builder: Some of these startups look an awful lot like pump and dump schemes.


Yes. Yes they are. But the pumper/dumpers do vet the startups for the ability to be goosed to the super high valuations. The numbers still have to work. It just doesn't have to be sustainable over 30, 40 years. Just perhaps 3 or 4 years.
 
2020-05-19 11:57:09 AM  

NotARocketScientist: FunkJunkie: I watched a YouTube vid about WeWork a couple of weeks ago and even after I couldn't figure out how exactly the company came to be valued the way it was.
The vid explained 'how' it happened but the 'why' of the way money starts to behave at that level is something I cant wrap my head around.

The way startups determine valuation is crazy. It has absolutely zero to do with the company and is completely dependent of how good you are at talking people out of money. If I talk a friend into investing $1,000 in exchange for 10% of the company, then the company is worth 10,000. If that friend is super rich, and is willing to give me $100,000 for 10% of the company, then the company is worth $1M. Doesn't matter what the company does.


This and using accounting practices that bolster your bottom line.
 
2020-05-19 12:08:13 PM  

FunkJunkie: I watched a YouTube vid about WeWork a couple of weeks ago and even after I couldn't figure out how exactly the company came to be valued the way it was.
The vid explained 'how' it happened but the 'why' of the way money starts to behave at that level is something I cant wrap my head around.


The grand plan, such as it were, was to have a WeWork, WeLive and WeLearn. Everything in one place: live in the upper floors, work in the lower floors. Kids learn in the in-between floors. Ground floor or the first 2-3 floors will be commercial: restaurants, groceries, retail, maybe gym/fitness on the second, maybe some nightclub sort of place.

The key was that when you sign on, you can move from one WeWork place to another and get a room without paying more. Let's say you live in SF and you're paying a very generous $1K/month for a unit. You move to Shanghai, you get to stay at a WeLive place in Shanghai paying the same $1K/month (your place in SF will be rented out to someone else Airbnb-style). For you, (a) you're not paying for two places, one which you're not physically living in and (b) you know where to go and how much you're paying, so no guessing etc. For the We Company, you're paying $1K/month to live in a place that they normally get $250/month. And they're earning money from your vacant place in SF (renting to a non-We client, presumably).

In a way, it makes sense. Housing and homes are not very efficient in that you live in a place 24/7, but outside of what we're doing now with Shelter In Place, you're not physically there 24/7. When you're at work, your home (whether you own or rent) isn't making anything for you. But if you can "micro-rent" the place for the 8 hours your away from home, for someone to crash for a nap, say for $30 for that 8 hours, well, that's not bad revenue for yourself. There's an inconvenience issue, but if you can deal with that in some way, that's not a bad way to go about earning some extra money. And that's basically the We Company's idea: squeeze office space, residential space, retail space for earning potential when there's unused times.
 
2020-05-19 12:10:30 PM  

Snarcoleptic_Hoosier: There is a freaking reason why tech bros suck at industries that require massive capital fixed costs.


They weren't buying the buildings. They were renting them out with super long leases.
 
2020-05-19 2:20:46 PM  
Maybe don't invest billions into a business that's led by a man that acts like a cult leader.
 
2020-05-19 5:59:20 PM  

dericwater: Snarcoleptic_Hoosier: There is a freaking reason why tech bros suck at industries that require massive capital fixed costs.

They weren't buying the buildings. They were renting them out with super long leases.


Not technically true.  Towards the end of Newman's leadership they raised a $3b fund to buy buildings WeWork leased, and have closed on one or two IIRC.
 
433 [TotalFark] [BareFark]
2020-05-19 8:02:51 PM  

This text is now purple: 433: The people behind Pets.com must be losing their goddamned minds every farking day.

Pets.com does something useful.


I don't think it's done anything for twenty years now.
 
2020-05-20 6:55:45 PM  

FunkJunkie: I watched a YouTube vid about WeWork a couple of weeks ago and even after I couldn't figure out how exactly the company came to be valued the way it was.
The vid explained 'how' it happened but the 'why' of the way money starts to behave at that level is something I cant wrap my head around.


The Dollop about WeWork and Juicero are wild and insane. Like anyone with actual business sense would be able to see that it was horseshiat from the get go.

Most of modern "business" is just vampire capitalism focusing on short term gains, pumping something up and then getting out while the getting's good but it crashes and burns.
 
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