Nine Cursory Observations About WeWork

Ah, the WeWork IPO. Well, technically The We Co., its new name, has claimed the ticker symbol “WE” even though it has not said what exchange it plans to list on. Does this mean Ohio State will get to copyright the word “The”? But back to WeWork. Where to begin? Here’s a cursory look so far:

1. All-male board.
2. Stated mission: “To elevate the world’s consciousness.” Wow.
3. Three classes of stock. The common stock Class A (for the public) carries one-vote-per-share. Class B and C common stock carry 20 votes-per-share.
4. Never made a profit since its founding 9 years ago.
5. Expects no profits anytime soon. Per its SEC filing: “We have a history of losses. We cannot predict whether we will achieve profitability for the foreseeable future.”
6. Founder and CEO, Adam Neumann, is also a major landlord of the company’s space. In the first half of 2019 the company made cash payments to landlord entities affiliated with Neumann totaling $4.2 million. Future minimum payments are projected to be $237 million.
7. The name Adam Neuman appears 169 times in the financial prospectus to which the company has responded this was disclosed to “avoid the appearance of any conflict of interest.”
8. Neumann has borrowed several times from his company. In 2016 he borrowed $7 million at an annual interest rate of 0.64%. That loan has been paid back. In April this year the company leant him $365 million at 2.89% interest. In addition, he has taken more than $700 million out of the company through stock sales and debt (Source: Wall Street Journal).
9. Coined a new non-GAAP financial measure: “Community adjusted EBITDA” which takes out rent, tenancy expenses, utilities, internet, salaries of the building staff, and other “building-and community-level operating expenses.”

Go Buckeyes.

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