I don't understand why it's an indictment. SoftBank decided to spend billions of dollars on a stupid risky bet, which is fine, they're allowed to do that. Then they tried to offload that risky bet onto the general public in an IPO. The system of modern finance said "hold on, this is a stupid risky bet, you can't use our money for it". So now SoftBank has to either accept the loss or make the bet successful without the help of the rest of the financial system.<p>That's what's supposed to happen, no?
I've been hearing surprisingly often the sentiment that WeWork is <i>"undercutting its competitors in a race to the bottom, using investor capital as oxygen to sustain losses while other serviced office-space providers ran out of breath and expired"</i>. This seems surprisingly disingenuous. The numbers show that WeWork is charging its clients at a gross margin that is comparable, if not greater, to traditional rivals like IWG [1].<p>WeWork might be operating at a net loss, but that is only because they are reinvesting all their money into growing their capacity. It seems unfair to accuse WeWork of winning simply by undercutting its rivals so as to starve them of oxygen. It also seems unfair to accuse WeWork of destroying the economy via unprofitable business models, and to accuse its CEO of being a complete charlatan, when they have successfully built a legitimate billion dollar business from scratch [1].<p>Is WeWork overvalued in its recent valuations? I think so. But that is the folly of its investors, and investors alone. The commentary that companies like WeWork are somehow fraudulent and worthless and ruining the economy, seems ridiculous.<p>[1] <a href="https://news.crunchbase.com/news/gross-margins-wework-and-the-public-comp-question/" rel="nofollow">https://news.crunchbase.com/news/gross-margins-wework-and-th...</a>
It simply shows what happens when investors lack due diligence. It also shows that the process for going public works: it lays bare the problems with private businesses that current investors are unable or unwilling to uncover themselves.<p>The only thing that worked out badly is how the employees are being treated.
WeWork is ultimately a feather in modern finance's cap. Wall street didn't buy the scam, and now the company is re-calibrating. Isn't that the way it should work?
> • Nesrine Malik is a Guardian columnist<p>Can anyone explain what does the above mean? Are they an employee, or a contractor?<p>I just suddenly became curious since they're portraying contractors as some sort of second class citizens, which they aren't at all, at least not in the software industry.
WeWork seems like it should be a buyout target either by a hotel chain or a restaurant chain (Starbucks?) since the basic model is "more permanent and slightly more private than a coffee shop"...
Isn't this a textbook definition of predatory pricing and illegal in the US?<p>WeWork’s strategy wasn’t simply to fulfil a practical need: its aim was market domination, to be achieved by undercutting its competitors in a race to the bottom, using investor capital as oxygen to sustain losses while other serviced office-space providers ran out of breath and expired. The idea was then to leverage its reach to name its terms and prices.