Rolling US Economy Into The Shitbin Thread

xxp flopson is that because it got watered down? or was it not enough to begin with?

Things WeWork's Adam Neumann has said to others

-he was interested in becoming Israel's PM
-he was interested in becoming president of the world
-he wants to be world's first trillionaire
-he hopes to live forever https://t.co/DjjF8xt2sn

— Eliot Brown (@eliotwb) September 18, 2019

I'd take him over Bibi certainly

Working out of his Tribeca apartment, he started Krawlers, which sought to make baby clothes with knee pads to make crawling more comfortable.

VC investors are the dumbest most credulous motherfuckers on the planet earth and I hope they all get leprosy

as discussed above, not necessarily credulous, just thinking they can find a bigger fool. But this might turn out to be a situation where they can't.

the 2008 financial crisis left commercial real estate in a smoldering crater but I'm sure this idiot has a plan to avoid that happening at we work before the next recession hits

I was trying to figure out when the GoPro CEO bought his $40m yacht and came across these sigh engulfing wiki facts.

To finance the business, Woodman borrowed $200,000 from his father (an investment banker in Silicon Valley), who still owned a 6.4% stake in May 2014.[17] Nick also borrowed $35,000 and a sewing machine from his mother, which he used to sew camera straps while experimenting with early designs.[18] Nick and his future wife Jill generated an additional $10,000 by selling shell necklaces they bought in Bali (for $1.90) from their car along the California coast (for $60).

On June 26, 2014, GoPro went public – closing the day at $31.34 a share. In 2014, Woodman was the highest paid US chief executive, paying himself $235 million while GoPro earned profits of $128 million.

paying himself $235 million while GoPro earned profits of $128 million

Now there is a person who understands capitalism.

ATH GoPro stock closing price was 93.85 on October 07, 2014. It's ~$4.50 today.

I worked on an intellectual property case involving a start up and VCs and that whole world just seems like it entirely consists of hype filled powerpoint presentations and business dudes exchanging contacts and favors

So is this the thread for this story?

https://www.wsj.com/articles/this-is-not-the-way-everybody-behaves-how-adam-neumanns-over-the-top-style-built-wework-11568823827

And this...anecdote?

After firing hundreds of staff, the WeWork CEO held a somber all-hands meeting explaining why it was a necessary move, but then trays of tequila were handed out and DMC from Run-DMC burst into the room and performed "It's Tricky" https://t.co/t9oGq8ebTb pic.twitter.com/cuq0aM1Tqi

— Tom Gara (@tomgara) September 18, 2019

oh cool it finally happened pic.twitter.com/cyLCjLcNAg

— Ryan Broderick (@broderick) September 18, 2019

https://boingboing.net/2019/09/18/wework-sounds-like-a-real-piec.html

zerohedge i know but

https://www.zerohedge.com/markets/wework-business-model-systemic-risk-economy-feds-rosengren-warns

WeWork's largest investor, SoftBank, and others moving to oust Adam Neumann as CEO

https://t.co/BiXN6Zwo19

— Eliot Brown (@eliotwb) September 22, 2019

lmao

*NEUMANN EXPECTED TO STEP DOWN AS WE CEO: DJ

— zerohedge (@zerohedge) September 24, 2019

https://www.nytimes.com/2019/09/24/business/dealbook/wework-ceo-adam-neumann.html

aw man the party was just getting started

the party is just getting started

pic.twitter.com/1NQytV21NR

— Zach Scott (@weinventyou) September 24, 2019

lol

oh my GOD

I swear every time the stock market takes a hit there is "news" of optimism regarding a trade deal with China so it goes back up. seems odd but idk anything about this shit

maybe you should buy a bunch of shares after it takes a hit and sell after modest gains. you'll stop before the hit sticks. it is easy to stop.

there’s this thing in macroeconomics called the equity premium puzzle, which basically says bonds are way overpriced relative to stocks given what we think of as reasonable preferences for risk, in classical asset pricing models. anyways one of the most famous attempted reconciliations of it was to suggest that people’s risk preferences (and more generally their beliefs about the economy) are shaped by the economic fluctuations they’ve observed in their lifetimes. so people who were old enough in the 70s are really afraid of inflation, etc. reading this thread makes me think of that; you guys are all a bit older than me, prob most of you experienced the dotcom bubble as adults whereas i was like 8 years old and 2008 was my ‘first’ recession. i find it puzzling that y’all are often trying to read macro trends from stuff like tech IPOs. like, wework, really? but i think it’s just this weird form of generational learning forming our perception of the economy

we're not weird you're weird

look at your name, flopson, what kind of name is that, a weird one

wow owned

Sonned in late night American beef

Wait, why are you guys over here when we're over here?

Silicon Valley Techno-Utopianism

i've been posting my wework content here for months on the basis that it's a credible global financial contagion and it's not really a tech company ¯\_(ツ)_/¯

flopson is eagerly awaiting their own traumatic financial black swan event.

Yeah, this is clearly not just old people's PTSD from stock markets past. Nothing about the current moment suggests that the fundamental laws of gravity no longer apply to today's market.

so why is wework uniquely poised to create a global financial crisis? it's a tiny little thing

i'm not trying to like, roast you guys for being old; it's really just a matter of a few years. it's interesting imo that such a small change in experience can have such a strong effect on our priors about the likelihood of some tech startups being overvalued sinking the economy

see zerohedge post above

:/

i thought this thread just randomly started focusing on wework because of ridiculous valuation and drama going on.

yerac otm. there may have been a suggestion that wework was some kind of 'Bear Sterns' harbinger of market craziness becoming exposed, but that was pretty farfetched. wework does exemplify some of the craziness at work in the markets, but it is not a linchpin. it is more an illustration of too much money chasing high returns and the misallocation of capital away from productive investment into stupid speculations.

Wework is not going to cause a global financial crisis

It is notable that one of the most talked about IPOs appears to have been built on exactly nothing and that several other notable internet companies have been built on similarly dubious foundations. There are certainly echoes to the tech bubble in the early 2000s.

It’s the largest renter of commercial real estate in New York, Chicago, and other cities.

And there is serious reason to think they will not be able to meet the financial obligations required by their massive leases.

“what WeWork has undertaken... is in fact $34 billion... of rent obligations to landlords... over the next 15 years... This for a company that grossed less than $2.6 billion in sales for the 12 months through June” https://t.co/90sHEdl76c

— Edward Harrison (@edwardnh) September 25, 2019

Yikes, ok, maybe they will take down the economy, lol

apparently if you had $47bn you could *buy* half the commercial real estate in the US. that's how insane the valuation is.

we've done the "could this be a contagion" thing on this thread before iirc. probably not on its own. but a major tech bust (which "we're done with IPOs for a while" could initiate) absolutely could (e.g. via california being way, way too dependent on tech IPOs for general tax revenue).

apparently if you had $47bn you could *buy* half the commercial real estate in the US. that's how insane the valuation is.

No, that's not correct. The total value of all commercial real estate in the US is over $6 trillion. Office alone is $1.7 trillion.

It's also not the right comparison since (in theory, if WeWork's model actually made any sense), the valuation of a WeWork company should be tied to the value of its income, not to real estate values (it doesn't own many properties).

yeah the wework numbers are tiny, the fact that they're the largest owner of commercial real estate in new york and wherever just shows how low the concentration is in those cities

WeWork is in no way a tech company. Everything it actually, functionally does could be accomplished with a telephone and a ledger.

xp- there's a reason why zerohedge say "single biggest tenant" but doesn't report its share, it's 260 locations in NYC

No, that's not correct. The total value of all commercial real estate in the US is over $6 trillion. Office alone is $1.7 trillion.

yeah i was thinking "that sounds like bullshit" as i was typing it but i decided to post it and be legends.

it was a misremembered version of this $100bn figure from levine yesterday

If a company is a mid-tier office landlord, I mean, the total equity market capitalization of all publicly traded office real estate investment trusts in the U.S. is about $100 billion; also many of them are profitable. If WeWork just replaced all of them tomorrow, then you’d about double your money from that $47 billion valuation. Nobody gets into venture capital because the best-case scenario is doubling their money. For WeWork, maximal office-landlording success would be kind of disappointing.