May 16, 2019

An Offer You Can’t Refuse

WdigW5TBloomberg reporting on a ‘possible’ inflated market.

This chap has been commenting for a while now that the ‘possibility’ the other chaps talk about is (shall we say) an ‘optimistic spin’ at best and that ‘possibility’ should be spelt C-E-R-T-A-I-N-T-Y. By itsself, the article is not so interesting, but when seen in the light of something Stowe Boyd wrote in his newsletter this morning, its worth a post. …

He had read the NYT’s piece about WeWork’s upcoming ’offer you can’t refuse’ - AKA - IPO - noting that their losses as measured against their profits were on the high side (but nothing new there - its table stakes!). But he went on …

My follow-up question is this: What happens to WeWork in an economic downturn, when many of its thousands of short-term renters may opt to move out, while the company still has to pay on its long-term leases?

Stowe Boyd

What indeed? AirBNB, Uber, Lyft none of them have such commitments. It’s as if the founders of WeWork have no experience of a down market …. oh wait …


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