The Inevitable Decline of WeWork
1,033,566
Published 2023-10-07
WeWork announced this week that it would not make two sets of interest payments totaling about $95 million, a move meant to jump-start negotiations with its lenders at the same time it tries to cut costs with its landlords.
The missed interest payments will spur speculation of a bankruptcy filing. But WeWork says it has the cash on hand, and the company has a 30-day grace period to make the payments, which were due Monday. At the end of June, it had $205 million in cash and access to a credit line worth $475 million.
Skipping an interest payment is not necessary to negotiate with lenders. But indebted companies sometimes use the move to put pressure on lenders to restrike deals under more favorable terms.
From its inception in 2010 to its collapse in 2023, WeWork's journey has been a roller-coaster. Once valued at $47 billion dollars, the company today, is on the verge of bankruptcy. How did the Venture Capital backed co-working company, end up as the biggest financial bonfire in Venture Capital history?
Patrick's Books:
Statistics For The Trading Floor: amzn.to/3eerLA0
Derivatives For The Trading Floor: amzn.to/3cjsyPF
Corporate Finance: amzn.to/3fn3rvC
Ways To Support The Channel
Patreon: www.patreon.com/PatrickBoyleOnFinance
Buy Me a Coffee: www.buymeacoffee.com/patrickboyle
Visit our website: www.onfinance.org
Follow Patrick on Twitter Here: twitter.com/PatrickEBoyle
Patrick Boyle On Finance Podcast:
Spotify: open.spotify.com/show/7uhrWlDvxzy9hLoW0EYf0b
Apple: podcasts.apple.com/us/podcast/patrick-boyle-on-fin…
Google Podcasts: tinyurl.com/62862nve
Join this channel to support making this content:
youtube.com/channel/UCASM0cgfkJxQ1ICmRilfHLw/join
All Comments (21)
-
Try out Blinkist for 7 days for FREE plus 25% off a premium membership! www.blinkist.com/patrickboyle. Thank you Blinkist for sponsoring today's video!
-
Adam Neumann is honestly one of my favorite CEOs of all time. Just a golden example of someone who has absolutely no place running a business continuously failing upwards. It’s inspiring in all of the wrong ways.
-
"The clothes were hard to sell, because they were horrible." I love finance stand up comedy.
-
"And his head of IT of his $100 million startup was a 16 year old high school kid nicknamed Joey Cables - who installed routers in the buildings for minimum wage." "Couldnt be contacted .. during school hours."
-
"Coffee lines get long in the morning. People like desks near windows." That deadpan delivery just got you a sub. Well researched, well presented.
-
To put this in perspective, there have been NFTs that have kept their value better than WeWork stock.
-
The moral of the story. Today's society isn't based on education, plans or hard work. It's about knowing the right people people with too much money.
-
Adam Neumann is the kind of impossibly charismatic entrepreneur that every first year business student high on cocaine thinks they are
-
WeWork is a classic example of a company that thrives in late-stage booms: when there's frenzied speculation and people throwing money at anyone who can tell a good tale.
-
".. as a worst case scenario, it can only fall an additional 100%." I simply couldn't stop laughing. I love his dry humor.
-
I’ve yucked my way through a few compilations of the WeWork collapse but the fact that well over 90% of the decision makers here continue to enjoy a life far more leisurely and luxurious than anything I can imagine…it stings a bit. Definitely stings. Accountability is just not a thing for the ruling class.
-
Masayoshi Son is my favorite example of how people with money often don't get it through hard work or talent. You just need dumb luck once and you can be rich as hell.
-
At one of my previous employers, I had the "privilege" of working in a Wework office. The really astonishing thing is how extremely overpriced the rent was (50x the rent per square foot of our most central business areas). It blows my mind thinking people still pay to work in what's essentially an overpriced nice-looking office.
-
Still blows my mind how people actually believed We Work was a "tech" company.
-
Whenever you doubt yourself just remember Adam & Rebecca Neumann were able to convince a lot of supposedly intelligent people to allow them to run this company and give them hundreds of millions of dollars. If they can do that, you can do whatever challenge is in front of you.
-
"They suited New Yorkers who were concerned their apartments were already too spacious" 😂There are so many gems in this
-
I interned at a startup that worked out of a WeWork in NYC on Wall Street from 2015 to 2016. I always thought something was pretty fishy because that whole time the offices were basically empty. If at 21 I saw how sus this was, then investors have 0 excuse beyond pure stupidity.
-
The first "Physical Social Network" was/is gossiping grandmothers.
-
"His wife Rebekah Paltrow insisted on choosing the paper for the IPO filing." I can't help but reminded of the business card scene in American Psycho. 🤣
-
Disgusting that a CEO that appeared to be defrauding the company by leasing from his own properties still got a layoff package...
