• 2 days 3 Restaurant Stocks In Full Recovery Mode
  • 2 days Bitcoin Is Driven By Testosterone
  • 7 days Quantum Computing Is The Newest Megatrend In Silicon Valley
  • 8 days How To Invest In The Cybersecurity Boom
  • 10 days Investors Are Patient With Unprofitable Giants
  • 12 days Wells Fargo Back In The Scandal Spotlight Once Again
  • 14 days 5 Stocks To Keep A Close Eye On This Year
  • 15 days As Auto Giants Flail, Look To Chip Stocks For Gains
  • 16 days Central America Is Ready For The Bitcoin Hustle
  • 18 days China’s Video Game Restrictions Unlikely To Slow Down Booming Industry
  • 19 days Top Performing Stocks As Inflation Fears Grow
  • 20 days US Airline Stocks Take A Beating On New EU Restrictions
  • 21 days This IPO Could Open Sustainable Fashion Floodgates
  • 22 days Crypto Crime Nets Another $2B Fraudster
  • 24 days This Week’s Hottest Meme Stocks
  • 25 days Why World Markets Should Be Watching Germany Closely
  • 27 days Could ‘Cultured’ Meat Rival The Plant-Based Megatrend?
  • 29 days ‘Easy Money’: Crypto Is Still Attracting Newbie Investors
  • 31 days Foreign Syndicates May Have Stolen Up To $400B In COVID Benefits
  • 32 days Gold Jumps Above $1800 Ahead Of Jackson Hole Summit
Robinhood To Trade On Nasdaq Targeting $32B Valuation

Robinhood To Trade On Nasdaq Targeting $32B Valuation

Robinhood, the most popular trading…

Chinese Stocks Rebound After Regulatory Scare

Chinese Stocks Rebound After Regulatory Scare

Sweeping crackdowns across diverse sectors…

Islamic Finance On Track To Hit $3.7 Trillion

Islamic Finance On Track To Hit $3.7 Trillion

Saudi Islamic Development Bank estimates…

  1. Home
  2. Investing
  3. Stocks

WeWork Reveals Huge Losses Ahead Of IPO

WeWork

As expected, WeWork - or "the We Company", as its struggling to rebrand itself - published on Wednesday the prospectus for its hotly anticipated IPO, which it confidentially submitted to the SEC months ago.

Of all the 'tech' darlings that have either recently IPO'd, or are expected to in the near future, WeWork's business so far has involved burning ever-more cash (roughly in line with revenue growth) while its CEO, Adam Neumann, shares his grandiose, expansive vision to build an office-space leasing company, that's also a provider of adult dorms, and a private school, and generalized lifestyle company.

To back up that vision with numbers, Neumann's company listed its Total Addressable Market in its S-1 as $3 trillion, equivalent to roughly 15% of the US economy. Of course, that's entirely unrealistic.

WeWork generated $1.54 billion in revenue in the first six months of 2019 and posted a net loss of $904 million, while losing an insane $1.4 trillion from operations. Astonishingly, the company has been valued at $47 thanks to VC investments by Soft Bank and other large institutional investors. 

What is more stunning is that the higher its revenue, the greater its losses, as shown below.

(Click to enlarge)

The IPO will leave WeWork with three classes of common stock, adding to its already complicated structure, which is set up to provide tax benefits to Neumann and other early investors.

In the filing, WeWork said it's "reinventing" the way people work and "relate to the workplace" (admittedly, an appealing turn of phrase).

"We are reinventing the way people work and transforming the way individuals and organizations relate to the workplace," the company said in the filing. "When we started, it was obvious to us that the solutions available in the market were not meeting the needs of the modern workforce."

The listing is being finalized as WeWork hopes to sow up another $6 billion asset-backed financing package. That package is reportedly contingent on WeWork raising at least $3 billion from its IPO, which it's expected to do.

However, with the recent bout of market turbulence, the company, which had reportedly hoped to hold its debut in September, might need to postpone. Which brings shareholders even closer to the abyss. After all, WeWork's business model isn't well-situated to withstand a recession, given the mismatch between the long-term leases it signs with buildings (some of which are owned by its CEO) that it rents, and short-term leases it offers its customers.

By Zerohedge.com

More Top Reads From Safehaven.com:

Back to homepage

Leave a comment

Leave a comment