WeWork filed for an IPO this week. They are most recently valued at $47BIllion from their investments. They are burning through cash, they offer month to month leases. During a recession who’s to say those customers won’t downsize their office. Their startup customers may go belly up. Or Perhaps they have such a solid model, they can weather it. They are growing at break-neck pace. Give it a year or two and maybe they are profitable, and can withstand downturns. They started purchasing buildings, which is what they need for stability. They are expanding and much more than simply “space for rent” and an all in one stop for workspace. The community / coworking / networking aspect is attractive to a lot of people too. I mean, there must be a reason why they are wildly taking on new customers and popular. Are they overvalued, valued just right, or undervalued?
It’s valuable as long as the real estate is. Just like Sears.
Except it’s all leases
Welcome to the bubble!!! It is not just WeWork, there are lots of other companies which have unreasonable valuations e.g. Uber, Lyft. Bursting of this bubble will be the trigger to the next recession.
Investors are overly confident or band wagon jumping - it’ll blow over in 2020 😑
Wework reminds me of webvan...one of the bigger busts in the dot com bubble.
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