The “How I Built This” on WeWork[1] was fascinating. Basically the 2008 financial crises increased vacancies in trendy places a lot. WeWork grew up with the trends in coworking. But really has turned into a very fancy middle man for turning buildings into beautiful coworking office spaces. The brand for a while had some cache, but the thing is many are realizing that they can also build beautiful coworking spaces and there’s no magic secret sauce IP or tech that makes WeWork special here. In this context, WeWork has only gotten weirder and full of itself... they just seem disconnected from reality from what they are while at the same time losing money hand over fist.

1 - https://www.npr.org/2018/08/31/643774290/wework-miguel-mckel...

> there’s no magic secret sauce IP or tech that makes WeWork special here

Indeed; they don't really have a moat. For customers who travel a lot, there might be some network effects, but I suspect they're the minority.

I think there could be something to economies of scale, but in the How I Built That podcase, they brag about every space is bespoke!

I’d pay for a version of WeWork that let me camp out for $10 get self serve coffee but was drab, boring, and decidedly antisocial

Basically a library next to a coffee shop?

More libraries need to sell coffee :)

> The brand for a while had some cash...

Couldn't resist fixing that for you. The little pun (homonym?) has some explanatory power for the company's current position.

Though the OP misspelled cachet, so I guess it should be "The brand for a while had some cash, eh?" :)

https://www.profgalloway.com/wewtf and https://www.profgalloway.com/wewtf-part-deux, more or less. Once you drop a S-1 and everone gets to look in your laundry basket, any number of things can happen.

They were counting on a big chunk of cash from the IPO that they could use to pay the interest on their massive debts and keep expanding and developing to keep the growth/valuation story alive. This was all undone when outside investors saw the S-1 had no clothes. Those debt payments still need to happen though, and no one buys the valuation story anymore so something has to give.

> How is it that this company went from filing for public offering to laying off up to 25% of it's work force...in just a few short weeks?

The wewtf link someone else posted is good, but essentially, it was burning through cash in order to grow. Its private investors (mostly Softbank) were OK with that, but the public markets weren't. They also didn't like management and corporate structure). Not being able to raise cash to continue hypergrowth and having faced a reckoning about the true business prospects and valuation, they have to cut back.

> ...focus on our core business, the fundamentals of which remain strong

I actually buy this line. At the end of the day, they're getting money for a product, so there's a business there. The main risk with We is that there's a recession, occupancy drops to 50%, and they're stuck with the leases. But that's not a unique risk.

> The main risk with We is that there's a recession, occupancy drops to 50%, and they're stuck with the leases. But that's not a unique risk.

What is unique is how massively overexposed they are to this risk.

Investors drove up the IPO valuation to make a big exit, then everyone realized the price was bullshit and it fell apart.

Matt Levine wrote a lot about WeWork in his Money Stuff newsletter. Start with the one from Sep 3.

Two ways. Gradually, then suddenly.