WeFail
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Go the way of PointCast.
That’s escalating quickly.
The WeWork thing is so confusing. Supposedly, landlords have paid for many of the facility upgrades. WeWork claims 90% occupancy. If they are at 90% occupancy and not paying for upgrades, then where is all their cash going? If each facility isn’t cash flow positive at 90% occupancy, then their business model is complete garbage.
It’s almost as if they pay $1000 to lease a space then lease it out for $500 to grow fast. Then they raise more VC money to keep the show going. I think that’s is what they do. The S1 says leasing from them costs $7,304 per employee vs $17,158 per employee in a standard lease. How can they rent for 57% less when they don’t own any building?
Revenue for first 6 months of 2019 was $1.5B and the location operating expense was $1.2B. That’s a 20% gross margin which is terrible for tech.
Casper Is Said to Work With Morgan Stanley, Goldman on IPO
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WeDone
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Softbank sunk more $ into a sinking ship?
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Can we now say that the pre-IPO valuation market was a bubble? Most of them have the same issues:
- Low gross margin
- Lack of scalable business model leading to employee counts far too high for the revenue
- High cash burn rates and no path to profitability due to lack of scalability
- Businesses that are structurally unprofitable as currently designed
Raising VC money at the next higher evaluation became the goal instead of building a viable business. Paying top dollar to hire tons of people in the hopes they’d figure out a viable business model was considered a business plan. All that did is accelerate the cash burn and slow decision making.
Now it’s all crashing down. Paper millionaires are holding options that are less useful than toilet paper and the layoffs are just beginning.
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Rajeev of SoftBank loves to buy companies like broadcast.com. Mark Cuban is probably itching to sell companies to SoftBank.
Thought is what Google boys did. Some1 came out with the highly lucrative AdWords model.
Learn from dotcom days 
Google had very few employees when it went public and was profitable though. The same with Facebook. They were run lean and the tech was scalable. Not many in this next generation are lean with scalable tech. They are getting exposed.
They should just send out a memo with the new share price based on the latest funding round. Once employees realize the options are WAY underwater, they’ll start looking for a new job.
The fact they hired their own janitors instead of contracting with a janitorial company is insane.