I was waiting for WeWork to IPO, so I could short that pile of shit.
It was going to be free money, just like when I bought long term puts on Lyft & Uber when they IPO'd.
I mean if you think that Lyft & Uber were buys, surely you'd think that WeWork was the next big thing.
Looks like even Cramer can't be fooled three times
Is this the end of unicorns?
I wish but vcs still have a metric shit ton of money invested in shitty companies they need to sell or ipo to try and get their money out. So I think they will keep trying to ipo and sell to idiot strategic acquirers until a triggering event forces limited partners to realize how much of their money is vaporized.
Sure, VCs right now are investing in high valuation, but the only one that fits what you’re describing is SoftBank. If you check out some other VC/GE discussions, apparently during some IC if a fund knows SB is in competition, they might as well not bid.
Just wait until some company releases a software that allows to properly scrap fake traffic from real online viewers, then you'll get correct numbers of a shit ton of unicorns.
At this point I'm convinced noone has done it yet only because it's too convenient for everyone to use the fake data. Capital flocks, the economy rolls. Sooner or later that has to end.
It's not the end of unicorns but maybe it's a start, regarding the mindset that has to change on both ends of the unicorn's horn; when a private company starts looking to go public.
There are many stories about private companies whose founders treated the company like their own personal bank, writing themselves millions of dollars in loans and then "forgiving" the loans. Or look at what happened at Theranos, where their founder simply refused to try different tacks in regards to getting her mini-blood-tester to work - she wanted it to be tiny, but the size of the blood samples had to be diluted to increase the volume to allow for all the tests she wanted to run on it, which then effected accuracy.
WeWork is a bat-shit crazy unicorn. The founder trademarked "We" and then sold it to the company for nearly $6M. And his finances are way too tied up with the company. Plus his special voting shares scenario is surreal.
While they almost doubled their revenue in the past year, they continue to be seriously unprofitable, losing close to a billion dollars in the first half of this year.
All these IBs, PEs, VCs and such... everyone loves to see those hockey stick-style forecasts when they look at private companies to take public.
Profit is king, I get that, but there's something to be said for doing some due diligence and trying to establish if your unicorn is a legit business that can really and truly weather financial and material storms in the real world and that the people they have in positions of power, while they might be colorful and unique compared to the 'classic' CEO of days gone by... if unicorns are going to be real public, you have to lay off the magical phrasing "our mission is to elevate the world's consciousness" [who the fuck includes that sort of working in a prospectus?!] and prove you are a serious business.
Then again, maybe this "start-up mania" has already hit or is close to hitting a very real brick wall.
I agree with you. I think all things tend to be in cycles, much like ocean waves that come in, crash, retreat, and are replaced by the next wave. I think what we are seeing now is the anti 1980's pinstripe clad CEO in a stuffy, mahogany office. Startups have had some huge successes with very odd, often poorly dressed, founders and CEOs. Google, Facebook, PayPal, Whatsapp, Amazon, Apple, and many more.
It is human nature to believe they are, and such their investment decision, special. Those other failures are failures because they're not me and me is awesome and intelligent. I know that THIS startup will be that 1,000x + multiple and make me rich. It's a step up from gambling, maybe a step down for Softbank but I digress.
I think the VC space will change to less of a roulette wheel and more of something like blackjack. I would liken PE to Texas Hold Em. Just in terms of volatility.
It appears that this is the trademark:
"Installation services, namely, installation of lighting apparatus, security systems, doors, HVAC systems, flooring, wiring, machinery, audiovisual equipment, fixtures and fittings for buildings, and computer hardware and telecommunication apparatus; construction consultancy and supervision; construction project management services; none of the foregoing services offered in the oil and gas industries."
I honestly don't see how this is worth $6 million. That kind of self-dealing is so unethical. At least he gave the money back under pressure
Neumann is a stage five weirdo
Didn't Adam neumann cash out hard during private rounds though? He's absolutely a scumbag but publicly admitting that he played the private markets perfectly while building a literal house of cards is just beyond me
affected*
How many people out there think they are “so cool and trendy” for investing in something like UBER or WeWork? Not that everyone who invested in them is stupid, but is there always a number of idiots to invest in hot bullshit?
Hello 1999.
Wonder what they'll call it this time......
What happened to WeWork?
Long story short, SoftBank was going to exit from that moronic investment by IPO'ing and leaving the bag in the hands of retail investors. Originally valued at 47B, they kept on slashing the valuation to the point it didn't even make sense to IPO anymore. I think that largely might have had to do with SoftBank's balance sheet. If WeWork is substantially below what they valued it at internally, what might that mean for the other non-profit generating companies that SoftBank has on its books?
Unicorns, no. There are a significant number of private companies that have revenues far in excess of 100M per year.
True but don't you think that sooner or later the dumb money has to realize that revenue multiples are bullshit. For most of the unicorns, if they were to use an EBITDA multiple; the valuation will be nowhere near $1B---hence not a unicorn
I would disagree with the blanket statement that revenue multiples are inherently bullshit. They make sense for high growth SaaS businesses that can achieve disgustingly efficient margins at scale but are deliberately toggling up their burn rates to maximize growth. But for WeWork yes, it was a beyond retarded metric to use because its nothing but a rehashed RE play that was bursting at the seams with nonsensical buzzwords. The dumb money needs to realize that the underlying business actually has to have a point of scale that can be achieved or the whole exercise is pointless.
Masa already had a record for losing something like $70B in the last tech crash. Why anyone thought this guy would be good at managing a giant pool of other people's money is the real mystery here.
Quasi consequatur nihil quos rerum. Ut modi dolorum iusto sed reprehenderit. Qui tenetur nulla dolores est quia et. Incidunt dolores quia itaque ab illum doloribus id.
Culpa repellendus occaecati ut distinctio. Incidunt ut amet deserunt. Repudiandae et asperiores saepe excepturi at.
Ipsum ducimus aspernatur quia eaque in. Dolores esse dolores eius eos qui quod qui. Vel ut illum id recusandae dolor nemo. Nemo facilis harum modi ipsam doloremque sunt quam.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...