On a spectrum we have Ponzi schemes, which never offer a product. We have MLMs which are legal Ponzi because there is an exchange of goods or services, but operate on social networks (original non internet meaning). Then we have franchise schemes where the wholesaling aspect is often less lucrative than the real estate angle (see also Sears, McDonald’s), and so despite offering goods they are de facto profitable real estate endeavors. Then we have manufacturers who actually work the way we believe these other organizations work, by providing goods to retailers who take over some of the salesmanship, logistics and risk for a slice of the profits.

Then we have WeWork. Which looks like a technical savvy landlord but under it all is subletting from one of the founders. Which I suppose would make this closest in structure to an IPO for a franchisee? That’s the sort of investment opportunity a bank would be into but makes no sense on the NYSE.

WeWork needs to get to a point where some to half of its properties were acquired under their own steam instead of through the founders. Otherwise it’s just a sucker’s bet.