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Is WeWork a smart investment?  


Bingran Lu
Posts: 16
(@bingran)
Active Member
Joined: 2 years ago

When you think about coworking, the first thing that comes to mind is probably WeWork. Such is the power of the brand.

If someone asked me if I would invest my own money in WeWork, the gut feeling answer would be yes. 

The reason why WeWork feels like a no-brainer:

- Coworking is on the rise

- WeWork is the undisputed leader of the industry

- Strong investor backing

But that's before I read Samantha's analysis on the prospect of WeWork's IPO

This is a good case for debate of gut-feeling investment vs data-driven investment.

Seeing how the IPO valuation has been cut from 47B to some 20B just today, I think I will be putting my money with the data-driven approach. 

Would you put your money in WeWork? I would love to hear your thoughts!

 

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Marina Alamanou
Posts: 29
(@marina-alamanou)
Eminent Member
Joined: 1 year ago
Posted by: @bingran

Would you put your money in WeWork? I would love to hear your thoughts!

I really don't know. I mean WeWork is like starbucks for me. Yes, is cool, is handy if you are travelling and is good for networking but I personally don't like shared working office space. In the long run you just need your space and privacy. In fact this idea of sharing an office space is lately under criticism. Some say, that they are loud and sniffly, and they are actually hurt our brains. So, it might be the case that after a while people might prefer a more "private solution".  I have never been inside WeWork so I don't know how is managed this cooperation sharing thing, but if I had to choose between a shared option and a more private option, I would choose the private option. So, for me the gut feeling would be no. I guess if the data driven approach also is no, No x 2 wins.    

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Samantha Monk
Posts: 2
(@samanthamonk)
New Member
Joined: 1 year ago

I mentioned in the article that Softbank decided to massively cut their investment in WeWork earlier this year. 

Yesterday the Financial Times reported that Softbank are now urging WeWork to cancel the IPO altogether!

You can see the article here: ft.com/content/111f8e00-d346-11e9-8367-807ebd53ab77

It seems that they have major concerns about how this IPO is going to go...

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Bingran Lu
(@bingran)
Joined: 2 years ago

Active Member
Posts: 16

@samanthamonk

If WeWork pushes through with the IPO regardless, do you expect it to do worse than Uber? 

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Samantha Monk
(@samanthamonk)
Joined: 1 year ago

New Member
Posts: 2

@bingran

Yes. I think its fundamentals are really concerning.

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Michael Woronko
Posts: 14
(@michael-woronko)
Active Member
Joined: 1 year ago

It's sort of a toss up for me. While a data-driven approach to an investment here would be sensible, like always, it also seems like the kind that may punish those who want to err on the side of caution. 

I've only been investing for about ten years but one of the primary lessons I've learned is that taking such risks is a necessary component to making substantial gains in a reasonable amount of time. As soon as the data trickles around to all potential investors, it's a different game entirely than it had been when opportunities and target prices remained much more abstract and unpredictable.

Of course, I'm generalizing a bit. Lots of concerns about WeWork that would convince me to avoid it but, if I was in the right mood, I'd consider letting my gut trump the data-driven shade that's forming over the company. 

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Hassan El-Essawi
Posts: 7
(@haasssan-e)
Active Member
Joined: 2 years ago

I've got a few issues with WeWork:

1. CBRE is soon entering the Co-working vertical (Subsidiary "Hana"), given their extensive inventory of buildings, demonstrated expertise and industry knowledge, and vast stores of real estate data, they will be able to outprice WeWork while simultaneously providing a stronger product to the end consumers.

2. The questionable business dealings their CEO has partaken in ranging from treating WeWork like a personal bank, to trying to trademark the "We" name under a seperate holding company.

3. Between Softbank and their board structure, WeWork clearly has some internal corporate issues that need to get sorted out before they begin offering their shares to the public. Clearly this IPO has been rushed and I am of the opinion that Softbank is making the right call asking WeWork to callback their offering.

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