> The company is a fraud

This is extreme. Adam’s self-dealing is abundantly disclosed. There is no evidence he is acting in bad faith. (Versus being deluded himself.)

Lots of businesses leverage paper-thin margins. Lots of businesses borrow short and lend long. Lots of businesses, particularly real estate businesses, feature self-dealing and family control galore. American corporate law goes out of its way to avoid criminalising stupidity.

There is a chance WeWork attains enterprise lock-in sufficient to let it weather a storm. There is a chance it expands cross-selling to bring its books into the black. These chances are slim. But they’re clearly disclosed.

> Lots of businesses, particularly real estate businesses, feature self-dealing and family control galore. American corporate law goes out of its way to avoid criminalising stupidity.

Self-dealing, as in how the founder leases his building to his firm, or how he owned and sold the We trademark to his own firm? I wouldn't call that 'stupidity'. In fact, it sounds very smart, for the founder. And unethical bordering on criminal.

I've heard it's not uncommon to separate low-multiple assets and high-multiple assets into different structures.

In this case, the builds are the low-multiple assets and they're being separated out from the high-multiple asset which is the management company.

Imagine a huge conglomerate who has the ability to take revenues in more than one division - you claim the revenues in whatever the market treats as having a higher multiple, thus inflating your “growth” story and your stock price. To financial folks it looks like you’re shedding old businesses and making a new hit, but in reality it’s a finance trick.

Wouldn't the buildings usually be owned by, like, a subsidiary of WeWork, or a holding company that also owned WeWork, or something?

WeWork is the junk company that only exists to funnel investor money to the founder via his other company.

This company is completely unlike the early days of Amazon or others who lost money, WeWork seems to have zero plan to ever make money or be profitable. It's just a ponzi scheme that is trying to push scam up and out to the IPO market.

It's a despicable fraud and would be completely illegal if we had a functional SEC. They are just amping up the Uber-style con game to the next level.

There will be dozens more scam companies like this until someone finally cracks the whip, so get used to it.

> WeWork seems to have zero plan to ever make money or be profitable

Last I checked, being up shit creek without a paddle isn’t illegal.

The problem with criminalising stupidity is differentiating genius and idiocy is often only possible ex post facto. We let investors take informed risks with their own capital. The SEC’s main job is making sure companies selling securities truthfully represent themselves.

There are many business models I never thought would work but which, due to scale, clicked. I’m sceptical about WeWork. But the way for them to die is for them to starve to death. If the Saudis (and Kazakhs?!) want to give them money, so long as they aren’t creating negative externalities, I don’t see the problem.

My god, this isn't rocket science bruh.

The SEC used to prevent companies from listing that were obvious scams. They simply need to start doing their jobs again, it's not a tricky differentiation problem or moral quandry that we need to bust out latin to explain.

Right, but who exactly is being forced to invest?

The VCs went into this with their eyes open and probably information rights.

The public has been told this stock features a CEO who scammed his own company out of licensing fees for the name, and features abundant self-dealing for leases of buildings he owns. Anyone who invests has been warned.

If it's that sure of a thing, then let's all work to solve the problem by shorting the price all the way to zero.

None of what you said challenges the idea that it's a fraud, rather just paints a picture of what's considered to be fraud in this case being widespread.

> None of what you said challenges the idea that it's a fraud

I’m not saying WeWork isn’t a fraud. I’m saying we have no evidence it is one.

People can reasonably disagree about whether a business model is sustainable. A bunch of people have bet one way. A bunch will bet the other. I don’t like WeWork, but I don’t like this idea that if outsiders disagree with the sustainability of a business model the government should shut it down.

If WeWork can realise cross-selling opportunities or unique leverage, through scale, over its lessors, it could work. It’s one thing to say something is stupid. It’s another to shut down the debate.

Fraud involves deception, what is wework lying to people about?

That's what gets me about it. They don't seem to be lying. I've always thought WeWork was more some kind of odd way for VCs to get exposure to Real Estate and have it look like a tech investment.

What I said is accurate. See the rest of the thread for arguments that they're a fraud and what is meant by the term in this case.

I'm genuinely curious, mind you I haven't read much about Wework.

So, I can understand how a company like Theranos is fraud, because they are lying and have no product.

But, I've used wework successfully, I know a lot of people using wework successfully. They have a product that works and that people pay for. How can such a company be a fraud?

> They have a product. How can such a company be a fraud?

Fraud, put simply, is lying with material consequences. If Apple said their iPhone can fly you to the moon, and you bought it on that basis, you were defrauded. That the product does a bunch of other useful things is irrelevant.

That said, I agree with you in us having insufficient evidence to label WeWork a fraud. They’re aggressively disclosing their weaknesses. No evidence of deception.

Disclaimer: I am not a lawyer. This is not legal advice. Don’t toe the line with fraud.

> If Apple said their iPhone can fly you to the moon, and you bought it on that basis, you were defrauded.

Or possibly, if you sued Apple for that, your suit would be dismissed because Apple's statement was "mere puffery": an advertising claim so outlandish that no reasonable person would be expected to take it seriously.

A famous example is Leonard v. Pepsico, Inc., where a Pepsi TV commercial showed some of the things you could get by redeeming Pepsi Points that you earned with your purchases. It begins with:

         T-SHIRT
     75 PEPSI POINTS

and ends with a high school student vertically landing a Harrier fighter jet in the school yard, opening the cockpit with no helmet on but a Pepsi in hand, and laughing "Sure beats the bus!"

     HARRIER FIGHTER
  7,000,000 PEPSI POINTS

You could also buy extra Pepsi Points for ten cents each if you didn't have enough for the prize you wanted.

John Leonard wanted that Harrier, so he sent PepsiCo a certified check for $700,000, minus $1.50 for the 15 Pepsi Points he already had, plus $10 shipping and handling.

When PepsiCo returned the check instead of sending his jet, he sued. Here's the commercial and the rest of the story:

https://www.youtube.com/watch?v=ZdackF2H7Qc

https://en.wikipedia.org/wiki/Leonard_v._Pepsico,_Inc.

https://en.wikipedia.org/wiki/Puffery

(I'm not commenting on WeWork, only on the lunar iPhone example.)

> if you sued Apple for that, your suit would be dismissed because Apple's statement was "mere puffery"

Agreed. The example was facetious.

The underlying point, that a company producing a useful product can still commit fraud, to customers and/or to investors, stands.

As, this is why so many businesses can claim to be the "Worlds Best".

that seems more like an exaggeration than a fraud if the product does work for the most part no?

> that seems more like an exaggeration than a fraud if the product does work for the most part no?

If you bought it to go to the moon, it doesn’t work as promised. If the lie was wilful, that’s honest-services fraud.

Less facetious of an example: you sell a company that makes lots of money but has a material liability on its books. The liability can’t kill the company. But you intentionally hid it from a buyer. The company still generates all those dollars. But your hiding this material fact from the purchaser is fraudulent.

Disclaimer: I am not a lawyer. None of this is legal advice.

It's not about the Wework product "office space" being fraud, but about the product "wework shares" being sold as a good investment which is questionable

> about the product "wework shares" being sold as a good investment which is questionable

Investments can be shoddy without being fraudulent.

Securities offerings are never suggested that they’re a good investment; the same way that a software stack doesn’t suggest it’s the best thing for your use case.

It’s up to you to evaluate the investment in question and decide whether you wanna invest.

Nowhere do they say it is a good investment. You can’t do that in an S1. Investors decide.

(Today I learned to “toe” the line... not to “tow” it!)

I think the point is not that they don't deliver a service; it's that the prospects for that service are far less rosy than they want you to believe, and the company is being gutted by disgraceful profiteering, nepotism, and what some people might call stealing.

It worked for Eddie Lampert with Sears.

having a product that works doesnt mean they have a good stock. They are not selling tickets to wework here, they are selling shares

Theranos was a fraud to consumers and regulators.

Wework isn't so much a fraud as the next pets.com waiting to happen.

I know almost nothing about finance, and the only things I had to look up in the linked post were "EBITDA," "DJIA" (which turns out to just be an acronym for the Dow Jones) and "flywheel effect." Seems pretty plain to me.

Because I'm a huge noob too I googled these terms:

* EBITDA or Earnings Before Interest, Tax, Depreciation and Amortization. It's pretty much the net (before-tax) income of the company (per year), but after expenses that are easy to calculate (like employees' salaries and rent).

* DJIA or Dow Jones Industrial Average. It seems to be an index of the stock market, meaning a number calculated from the price of a selected number of stocks (in practice, 30 large US companies).

* The Flywheel Effect. I guess to understand this one you need to understand what a flywheel is, it seems to be a pretty heavy wheel. The metaphor here is that building a successful company is like pushing a massive wheel for a very long time until it catches some momentum and roll by itself?

It's worth noting that the DJIA comment was specifically mentioned because it contains only 30 companies and a terrible indicator of the overall health of all American companies. But it's used as the primary indicator of the health of American companies in nightly news reports.

"Similar to the DJIA, last-round private valuations are harmful metrics that create the illusion of prosperity."

A lot of people just wish the DJIA 30 would disappear from popular use. It's a harmful metric that gives the illusion of prosperity.

The Russel and S&P are generally right next to the Dow in financial news. There is value in each of those indexes if you know what you are evaluating. The health of large companies does reflect the health of the overall economy for the most part. Combining that with the S&P gives a pretty good measure of the US economy.

The only people who don't like the DJIA are nerds who are annoyed that such a simple model works so well at approximating the whole market:

https://www.marketwatch.com/investing/fund/vtsax/charts

Flywheel effect is a jeff bezos/jim collins (good to great) reference: https://medium.com/swlh/the-amazing-flywheel-effect-80a0a21a...

And that can be used to spin up secondary revenue streams more easily than starting from scratch.

A simple way to reason about EBITDA, is raw earnings before tax and accounting specialists come in and do financial engineering. Typically accountants will do some magic to earnings by using ITDA, so this gives a bit more of a uniform earnings picture across businesses.

Another way to reason about it is "earnings before bad stuff." Your explanation makes it sound like it is a superior measure by painting the other GAAP measures as "financial engineering." EBITDA is vastly inferior, although it has some uses in comparisons and also glossing over bad news.

Examples: I take a loan with 1 million a month in interest payments and I "invest it" and "earn" 1 million a month. EBITDA: 1 million a month. Amazing! Real world, net zero.

I buy a 20 million dollar piece of equipment that lasts 20 years. From it, I "earn" a million a year. EBITDA: great! Real world, net zero.

Each financial metric tells a story. They each tell different stories so it is not a case of one being more important than the other. EBITDA is a way to compare similar companies that may have different capital structures. So it allows a side-by-side comparison of the core business.

For instance, Companies A and B are competitors in the same market and both have a million dollars in annual revenue and earnings of $100K. Are they both worth the same? What if I told you that Company A has no debt, and is depreciating its assets at an accelerated rate (ie is "paying off" its capital investments rapidly) while Company B is loaded up with massive debt and is depreciating more slowly? That changes the picture a little bit, doesn't it? This is why you have different metrics. Think of them as clues in a detective story rather than horses in a race.

To quote myself:

> although it has some uses in comparisons

So we agree about that. In terms of EBITDA's "other uses" your example proves my point? From an EBITDA perspective, those companies look the same, so if you want to paint a rosy picture and you're the company with lousy financials, EBITDA is your go-to metric for your talking points.

I disagree it can be indicative of the real world. It is if I’m buying it from you. If I’m buying the business id like to understand the cash flow I could expect. I’m not necessarily going to have that loan with interest or the same taxes so it makes sense to pull it out and have an earnings only metric

> "DJIA" (which turns out to just be an acronym for the Dow Jones)

Dow jones compiles indices on several sectors, not just the Industrials. Hence the four letters in the acronym.

That's extremely misleading. DJIA is the original one and it's named that because A is for average and DJ is for Dow Jones. So only one of letters could vary in context, and only the I is the one people mean when they take about Dow Jones.

"The Dow" or "the Dow Jones" always means DJIA.

The WSJ is owned by "Dow Jones the company". Not "the" Dow Jones, I'll grant.

It comes up in their articles sometimes, and is probably why they prefer to refer to the DJIA as a measure of market price than the SPX.

Oooh thanks.

Parent post was misleading, though.

I liked the post except for its repeated use of the nonsense buzzphrase "virtue signaling." WTF is that supposed to mean?

We have lots and lots of words; I don't believe this BS phrase fills an otherwise unfillable gap.

I find "virtue signaling" is a useful concept; It's the idea of doing public things that signal how virtuous you are, but don't have the impact they suggest. Example might be front-yard cactus gardens to save water compared to lawns ? (while ignoring washing , agriculture, and industry )

It seems irresponsible to use the term fraud. You need strong evidence to accuse someone in a criminal offence.

Fraud is Theranos. We seems more of a BetterPlace - delusional, charismatic founder + too much money - sound business model.

You can never be sure that it is a fraud until someone is convicted. Convincing the company that you are the CEO of to pay you personally $5.9 million dollars for the trademark "We" (after you started the company and called it WeWork btw.) could be considered defrauding investors if the trademark "We" was not really worth $5.9m.

It's not fraud until someone wins in court. And not all cases of fraud are pursued.

A lot of the behaviors of the founder seem outrageously fishy, however they are legitimately filling a rapidly growing need. At this very moment I have the WeWork Toronto locations page open as I contemplate biting the bullet on a private office there just to get out of the home office occasionally.

I think the author's point is, that in a recession, you wouldn't bite the bullet, because you (the average consumer) become cost-conscious. The idea is that therefore, WeWork's revenue model can turn on a dime but their debt obligations go nowhere when that happens, and then they are in a hole.

Moreso, the author's point is that other businesses that have these long-term depreciations trade their equity at a much smaller revenue multiple. He's basically saying, you can't escape the fundamentals.

Recession could be hedged with stock options, no? At their scale they will get custom-tailored option product to match their liabilities.

it'll be super expensive to hedge -- the higher the volatility of the underlying asset (here, the number of people who pay for a desk or whatever), the more valuable/expensive an option on that asset is. but I also don't think it makes a ton of sense. in effect, WeWork would reduce their cash flow growth, with payments going towards hedging. their entire pitch is that they are a fast growing company, which justifies an insane multiple, any hedging would reduce that risk.

you don't hedge against decreases in demand via financial instruments, instead you: 1. hedge against decrease in demand through diversification of services; if wework sells some property management software (for example) then that might be more recession-resistant than their actual leasing business. 2. hedge against decrease in demand through long-term contracts: getting IBM to sign a 10 year lease (for example) is usually a safe bet that you'll have a tenant through the recession; on demand hot desks are much less safe 3. hedge against cost increases using financial instruments: most corporations doing hedging are hedging against commodity price changes, e.g. airlines buying oil futures or mcdonalds buying beef futures. similarly, wework might buy kombucha or aluminum cup futures, but there is no derivatives market for on-demand desks :)

of course, there are different perspectives on this. matt levine has a really interesting column about the different philosophies of where diversification belongs, at the corporate level or at the investor level: https://www.bloomberg.com/opinion/articles/2019-04-09/ceos-l.... my finance classes were relatively recent so you might be able to tell my bias.

Patent post suggested drought of renters due to a recession. Recession can be hedged against by purchasing e.g. 12 months options that are far enough out of the money to be cheap yet close enough to cover a major recession event.

I don’t know if the math adds up, but I think it deserves studying.

I’m not looking to hedge against all kinds of customer flight with an instrument, that’s clearly foolish as you noted. But particular events can be hedged.

The cost of consistent recession hedging is prohibitive and larger than the benefit you’d receive, because of arbitrage (if it was cheaper than risk, you could invest risk free).

See: https://www.aqr.com/Insights/Research/White-Papers/Pathetic-...

If you could hedge a recession, we’d have no recessions :)

Hedging only works if you have short time durations (eg you wanna hedge specifically in October, because you have a big bill due then), or if you’re the one providing the hedge and capturing the Volatility Risk Premium.

I'm not looking for a blanket hedge though.

"We Work" can have a built-in cushion against smaller recession events - long-term leases, being able to predict which percentage of short-term leases will dry up, cash reserves, some sort of counter-cyclical lease agreement (e.g. with repo companies), counter-recession marketing/education/etc program (e.g. "let's beat recession together by sticking together!" or some such).

Where the hedge is coming in is making sure that the company does not end up upside down if recession hits harder than the built-in cushion can absorb. They could be buying 12 month S&P500 options on a rolling basis - buy a new batch every month as the previous batch expires. The idea is not to get paid each time SPY drops 5% down, but to get paid when it drops 35% down signaling an actual market crisis and have enough time/money to survive the hit.

I don't know if it makes sense as I'm just making this up as a I go, but your criticism is selling the idea short. Ahem.

what underlying asset would you buy the options on? if it's just on the overall market, then what advantage is there for wework to do that versus an individual investor?

I have made a long reply to a sibling comment.

Hedging via options is guaranteed to cost more than the benefit you’d receive, over the long run. This is due to the volatility risk premium (the insurers against risk must be paid, and will price it to come out ahead).

See https://www.aqr.com/Insights/Research/White-Papers/Pathetic-...

But no, you cannot hedge away risks of a recession - for cheaper than what a recession would cause.

It is not free or magic to do that.

There are dozens of non-WeWork coworking spaces across Toronto.

For sure, though the common model seems to be going in a class B building on a highway somewhere on the periphery and setting up an incredibly drab, soul crushing office. I've worked for Bell and RBC -- I've already done the soul crushing office thing.

I have absolutely no doubt that I've missed some good ones, but that's how WeWork made me interested in something that I'd put off for so long -- really nice looking interiors in great parts of town/great buildings. They are in no way a tech company, however their aesthetic and values do more closely mirror tech companies than a lot of their competitors that are low cost satellite office providers for low-tier organizations.

I don’t know about Toronto, but, here in Philly, we are at the Make Office at 20th and Market, diagonal to WeWork.

We have private offices, better views, zero annoyance from fellow lessees (nobody leaning over to sell us insurance while we have headphones on, or harassing us about their recruiting services), pay half the rent (even less, now that we signed a long-term lease, previously we were month-to-month).

As far as I can tell, the WeWork across the street has a nicer interior and better coffee. That’s it. That’s all.

And it’s way more expensive and has a way more distracting culture.

The reason WeWork is a better offering is that they’re losing money and investors are paying for this nice interior.

This is all nice for customers, but makes for a shitty investment.

WeWork doesn’t have any real competitive advantage when you want to turn it into a healthy, profitable company. Then it will just be any other coworking space; perhaps a more fancy one, but also more expensive.

You’re disregarding brand appeal.

Starbucks has no real competitive advantage over Local Coffee Co. other than great location, decor and brand appeal too. Thats what OP argues were the deciding factors for them. To attribute nice decor as being nothing more than a sunk cost is erroneous at best.

That's not correct. Starbucks has incredible economies of scale and purchasing power at this point.

Clearly Wework has at least some economies of scale, but as for purchasing power not so much. The mass importation, distribution, and sale of a perishable agricultural product is a whole different kind of thing.

Let’s go with your argument. What economies of scale and purchasing power would make for a differentiable competitive difference vs Local Coffee Co? Are those economies the driving force for Starbucks success? For their competitive advantage in the eyes of a consumer?

WeWork is an international brand. Can you name another coworking space in nearby [state/country]? On the other hand there’s prob a WeWork there with a certain consistency wrt quality that you’d expect.

I can, Regus. They’ve been around forever, this business model is not novel.

But the lack of examples doesn’t support the argument the way you think it does.

That means it’s very much an open question if this model could ever be successful. Unlike chain food/beverage which is a highly proven business model.

But you still haven’t given me an example. Thusly any competitor to come into this space would have to spend as much as WeWork at least to unseat them or to make a competitive brand for themselves. Sure the market’s not new, but the solidified brand in this market is. That counts for a lot.

I have indeed given you an example, it’s called Regus. Google it, they have an international brand too. Wework now has a higher profile.

Good for them, but what’s that worth exactly? Having brand recognition is not at all the same thing as a barrier to entry of a market, or a network effect.

The market for shared or managed office has very low barriers to entry and modest network effects. Thus making the concept of a monopoly in this market more than implausible.

> What economies of scale and purchasing power would make for a differentiable competitive difference vs Local Coffee Co?

If Starbucks spends less money buying coffee, that means they can afford to spend more money on nice decorations (and better real estate, more ads/PR to increase brand presence, etc.) than Local Coffee Co. The real estate/furniture is presumably a relatively small portion of the operating costs of a coffee shop, so e.g. buying 10% cheaper coffee beans could mean getting a location that's two times as attractive to customers.

WeWork might not be able to do that as easily because for them, the real estate and furniture is their only product.

Cost of coffee in cup of latte is less than 25cents and Starbucks sells latte for $4.5. I am sure Starbucks has small price advantage compared to local coffee shop but this advantage is minuscule for widely traded commodities like coffee, milk and paper cups. I doubt that's their main competitor advantage.

Personally for me ability to order Starbucks coffee online and have it ready when I get to the store is a game changer + consistent user experience. Local coffee shops are always hit/miss.

So a competitor to WeWork would have to spend even more than WeWork to compete vs the brand. They’d be even more strapped for cash for PR/ads than the main player. They have the first mover advantage.

> So a competitor to WeWork would have to spend even more than WeWork to compete vs the brand. They’d be even more strapped for cash for PR/ads than the main player.

WeWork won't be able to maintain their venture-capital-fueled level of spending forever. Starbucks' economies of scale aren't a one-time "build the brand" thing, they're a constant source of capital that allows them to continually build and maintain storefronts better than Local Coffee Co can.

I can totally see a world where WeWork, forced by the public markets to attempt to reach profitability, stops putting as much money into their buildings and furniture as they currently are. Then, the next real estate firm disguised as a tech startup can raise private money at a forty-eight million dollar valuation, build even nicer offices, and eat their lunch.

> They have the first mover advantage.

I am not convinced the first-mover advantage is very significant in the short-term office rental industry! WeWork got a lot of customers by selling nice offices at below cost, even though other players in the space had been around longer. Who's to say another company couldn't do the same thing?

Starbucks also has incredible gross margins of close to 60%. Almost as high as a SaaS business (70-95%).

WeWork has 10-15% gross margins.

"Gross margin is a company's net sales revenue minus its cost of goods sold (COGS). The gross margin represents the amount of sales revenue that the company retains after incurring the direct costs associated with producing the goods and services it sells."

Starbucks does not have more competitive gross margins than Local Coffee Co. would to be a big enough differentiator.

Starbucks also has product consistency. I know a Flat White in Kansas City will be the same as a flat white in Vancouver. If you like that product, that consistency is welcome.

So that would be a similar case for WeWork where you’d expect a bar for quality of offering

Starbucks has good coffee, at least in France it's the only good drip coffee I've found

Additionally to CPLX's point, they can also move profits into low-tax countries by licensing their brand. The fix costs for that are too high for a Local Coffee Co. to copy.

> I have absolutely no doubt that I've missed some good ones, but that's how WeWork made me interested in something that I'd put off for so long -- really nice looking interiors in great parts of town/great buildings.

(I understand that most WeWork locations should look about the same, so…)

I still don't get how their "private" offices have glass panes for walls. That's horribly unconducive for work.

Go visit them before you buy.

I visted the WeWork office on Bloor last year, and it was more like a party than I would like. Seems like a great place to meet a future spouse. Not necessarily a great place for quiet, deep work without noise.

They have a lot of social events. Seems to be their big selling feature. So if you are looking to prospect for customers like a real estate agent or something, maybe it's worth it.

There are definitely offices as good or better than WeWorks in the downtown core. Most of the companies will give you a free day or something so you can actually work there and see what it's like.

We ended up at iQ offices, much quieter than WeWork. Workplace One's new location also seemed pretty compelling, just not in as good a location for those of us commuting on the go train. If internet speeds are important, make sure to ask about that, because most of the offices we talked to had pretty shit speeds.

In Toronto if you're looking at WeWork look at Workhaus as well. My employer just rented with them and I'm pretty impressed. Definitely not boring suburban spaces.

Be sure to cost/feature compare too! https://www.regus.ca/office-space/canada/ontario/toronto

Frankly, this is what I don't understand in this whole charade. IWG has a decent 2.5 billion yearly revenue and wringes a paltry 0.1B net income out of it. I mean, good for you, employing near 10 000 people and still being profitable but still, a 4% profit margin. That's razor thin and it's not immediately visible what WE is going to do so much better -- or better at all.

Would it not be more economically prudent to simply rent a small office? When I looked into these shared spaces, I found them to be a significant rip-off.

..until you pay utilities, sign a lease, pay various insurance, furnishings, security, reception, etc. The rent cost of a small office doesn’t include all of the various things you have to often pay to make it I habitable.

Depends on scale & of course location/local market. If you're only a couple of workers it isn't cost competitive to rent your own office and take care of everything.

Because it's so obviously a fraud that to say so doesn't add anything to the conversation.

On the other hand the fraud is wrapped in the most delicious of absurd flfftery that it's a pleasure to try to ape it.

How is it fraud? Investors make idiotic investments. Nobody is being forced to buy shares of WeWork, and all the financials are there. It’s not like WeWork is lying about financials.

Consider the illegality of Ponzi scheme: nobody is forced to participate, investors make idiotic investments, and yet, because of the essentially certain loss of money, it can be regarded as knowingly defrauding the investor.

A Ponzi scheme lies about the source of returns. WeWork is not lying about any financials. WeWork is not a Ponzi scheme and you know it.

My assumption is these investors know what they’re doing. So they’ve structured things to sell a bag to the public, arbitraging the difference between reality and regulatory requirements/what is documented generally.

A conversation about fraud often litigates whether or not omission is a form of lying.

What did they omit that constitutes a lie in your opinion?

I'm not sure there's fraud here. It's more akin to voting for Trump to "Make America Great". It's purely a pr / sales-pitch and if people decide to invest they may lose their money or they may not. If I believe the S-1 it pretty clearly lays out the shadiness and ridiculousness of the company without being fraudulent.

>it should be explained with facts, and clear simple language.

since it looks like you've spent some time on this, would you care to take a shot?

What makes you think I understand this? my comment originated from the opaque language which read more like works of satire than actual analysis. All I can tell is that the whole way this company and its investors are acting is bat shit crazy. I'd like to get better analysis that is less "entertainment" and more factual and analytical.

>What makes you think I understand this?

The fact that you stated "The company is a fraud", before saying that this should be stated plainly. Since you didn't say something like "...from my point of view I certainly have the impression that..." or something like that. Since you spoke definitively, I assumed you have a definite opinion you formed somehow.

It's actually just satire with numbers. Which seems better than satire by itself by a mile, and (personally) also better than rote numbers listed because it's amusing. Why complain?