Filed under: A Bit Of Inspiration, Attitude & Aptitude, Corporate Evil, Technology, WeWork
I know the world has been affected by COVID.
I know most people are working from home rather than offices.
But … but … look at these results from WeWork:
I’ve written a lot about WeWork in the past.
I even worked with one of the founders in their early days at Wieden.
And there was even an occasion where they were talking to us at R/GA.
In every one of those encounters, I never understood why they referred to themselves as a tech company. Actually let me rephrase that. I did understand why they wanted to be seen as a tech company as it would mean their valuation would probably be even more ridiculous … but the way they talked about themselves in the early days – and the thing they were doing to make it real – meant they could still be something very powerful and influential if they’d just stuck with their path.
But they didn’t, which is why with Q1 results like that, it would appear their version of being a tech company was to be like Microsoft Vista.
Big hype.
But a terrible, terrible, terrible experience.
Which all goes to show that many in the investment community don’t make decisions on identifying new opportunities, but on being scared of being left behind.
Like most brand planning.
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.con not .com
Comment by George June 9, 2021 @ 8:13 amOh that’s good. I’ll be stealing that. Hahaha.
Comment by Rob June 9, 2021 @ 8:51 amwho did you steal that from because you sure as shit didnt come up with it.
Comment by andy@cynic June 9, 2021 @ 8:18 amI likely stole it from somewhere. It sounds too smart for me.
Comment by George June 9, 2021 @ 8:24 amglad you fucking know it.
Comment by andy@cynic June 9, 2021 @ 8:28 amYour generosity knows no bounds.
Comment by George June 9, 2021 @ 8:32 amand the money men say theyre the smartest pricks in the room. what a bunch of fucking delusional leeches.
Comment by andy@cynic June 9, 2021 @ 8:20 amSome are very smart. But too many think that because they work in the money markets, they’re gods when really they’re devils.
Comment by Rob June 9, 2021 @ 8:52 amMoney can buy a lot of stuff but not brains.
Comment by Pete June 9, 2021 @ 8:22 amjust ask campbell.
Comment by andy@cynic June 9, 2021 @ 8:29 amFreebies don’t cost money.
Comment by John June 9, 2021 @ 8:36 amThat Robert Collings is a very linear thinker. It turns out he’s an accountant, so that figures. But, if occupancy were near 100% that would be an indicator of buoyant demand and their rents would have been much higher. Not enough to turn a profit, but still.
Comment by John June 9, 2021 @ 8:35 amWhen you have buoyant market and still can’t make a profit then your business model has some serious flaws. In my opinion they had a good idea but their ego drowned it.
Comment by George June 9, 2021 @ 8:46 amthis is campbells blog. stop acting like its fucking bloomberg.
Comment by andy@cynic June 9, 2021 @ 9:16 amBrand planning is brand hoping.
Comment by DH June 9, 2021 @ 8:35 amMost stuff is. The majority is ‘best guess’ … that’s not bad per se and can be very sophisticated, however when people claim to guarantee success … especially when talking about innovation … it just makes me feel a bit ill.
Comment by Rob June 9, 2021 @ 8:54 amDon’t disagree on the positioning of a tech company versus real estate. But the “crude” analysis (it’s hardly analysis) that you provide on the accounts, is just lazy. How about posting the accounts and let others decide for themselves.
WeWork continues to make significant progress in transformation of its business and strategic optimization efforts
Desk sales and occupancy trends improved sequentially during Q1 and WeWork has experienced continued strong momentum in Q2
Global desk sales increased sequentially throughout Q1, from 24k in January, to 25 in February and 38k in March, for a total of 87k desk sales in the quarter, or approximately 4 million square feet signed
Enterprise sales driving strong demand for WeWork’s suite of flexible product offerings; Enterprise represented 60% of total contract value signed in Q1
Adjusted EBITDA in Q1 2021 was slightly better than Q1 2020
May 20, 2021 05:36 PM Eastern Daylight Time
NEW YORK–(BUSINESS WIRE)–WeWork, the leading flexible space provider, reported results on May 17, 2021 for the three months ended March 31, 2021.
Company Operating Results:1
As of March, WeWork’s global real estate portfolio included 774 locations across 38 countries, supporting approximately 963,000 workstations and 490,000 memberships.
Enterprise Membership of 51% was in-line with the prior quarter, and the average commitment term for Enterprise members increased to approximately 27 months.
Gross desk sales were approximately 87,000, representing an increase of 19% quarter over quarter. Enterprise represented 60% of the total contract value for the first quarter.
Total Occupancy increased to 50% relative to 47% in the prior quarter.
Company Consolidated Financial Results:2,3
First quarter total revenue was $598 million, a quarter over quarter decline of 10%, driven by WeWork’s exits of non-core businesses.
Comment by Doug Watson June 9, 2021 @ 11:27 amNet loss was $2,062 million for the first quarter, net of $553 million of interest and other (income) expense (including $352 million change in fair value of related party transactions (SoftBank warrants), $99 million in net interest expense, $71 million of foreign currency loss and $31 million of other expenses), restructuring costs of $494 million driven by non-cash SoftBank stock purchases and settlement with Adam Neumann, impairment of $299 million driven by building exits, depreciation and amortization of $184 million, stock-based compensation of $51 million, $31 million in legal costs, and $3 million of income tax provision, resulting in Adjusted EBITDA of negative $446 million.
Adjusted EBITDA was negative $446 million for the first quarter, which is an improvement of $26 million relative to the prior quarter and an improvement of $3 million as compared to Q1 2020 Adjusted EBITDA of $449 million. Adjusted EBITDA includes $20 million of rent expense that is associated with buildings pending lease exit.
Free Cash Flow was negative $663 million for the first quarter, representing a decline of $35 million compared to the prior quarter.
Available liquidity was $2.2 billion as of quarter-end and included $719 million of cash on hand.
Cheers
Doug
I am confused Doug. Are you suggesting these numbers are strong? answers.
Comment by Lee Hill June 9, 2021 @ 2:50 pmI appreciate your comment Doug, but – as I said on LinkedIn – while the information [which wasn’t from me, to be clear] is selective … it does capture how crazy that company behaved in the past and highlights how far they have to go. You may think it is superficial, but with their form, it is also valid … and I say that because beyond the numbers, I worked with them at a senior level at one point and saw it first hand.
Just posting their numbers in more detail doesn’t change that fact, especially when you don’t take into account the context of where those numbers come from, the reality they’re not great numbers and as a company, they have a history of ‘managing’ how they present themselves. [ie: WeWork continues to make significant progress in transformation of its business and strategic optimization efforts]
So while you can think what was presented was crude and social BS, the reality is this is a company that still needs to prove they’re a viable business or an ego.
Comment by Rob June 9, 2021 @ 6:51 pmoooooh i can copy and paste a load of financial shit off the internet and think that makes me gordon fucking gekko when it says theyre still shit, just a fraction less shit than last time.
Comment by andy@cynic June 9, 2021 @ 10:27 pm