<story><title>WeWork’s Back Is Against a Wall</title><url>https://www.wsj.com/articles/weworks-back-is-against-a-wall-11568733815?mod=rsswn</url></story><parent_chain><item><author>wayoutthere</author><text>You have a point; $15B is on the high side and I can’t defend it. But they do have a &lt;i&gt;brand&lt;/i&gt;, which is what makes an undifferentiated service like office space valuable.&lt;p&gt;I still contend that most of the value of Uber is tied up in their brand, and I think the same is true of We. I’m not sure either of their operations are all that valuable.</text></item><item><author>arbuge</author><text>&amp;gt; WeWork is probably legitimately in the $15B range&lt;p&gt;How do you arrive at that number?&lt;p&gt;I&amp;#x27;ve seen comparisons to firms like IWR &amp;#x2F; Regus that imply a much lower number would be appropriate, even if WeWork was as profitable as those firms (which it isn&amp;#x27;t even remotely... it loses money hand over fist).</text></item><item><author>wayoutthere</author><text>As has been called out by other analyses, the problem here isn’t really WeWork, it’s SoftBank. They thought they could run a pump-and-dump like Goldman did with Uber, but sorely misjudged the market’s view of WeWork.&lt;p&gt;WeWork is probably legitimately in the $15B range, but SoftBank has really tied themselves in a knot with such a high valuation paired with the downside insurance. They‘re in for an 11-figure loss no matter what, because liquidation preferences and huge losses scare off any serious investors they could potentially find.&lt;p&gt;My guess is that WeWork ends up getting massively scaled back and sold to one of its smaller competitors for under a billion. They’re just way too overextended to have any value beyond the brand.</text></item></parent_chain><comment><author>aetherson</author><text>So the problem of these companies that are many billions of dollars having &amp;quot;most of their value tied up in their brand&amp;quot; is that the brand becomes...  kind of inextricable from the operations.&lt;p&gt;Who would buy a $10B brand?  Much less a $30B one or whatever?  The answer is almost exclusively &amp;quot;companies that already have a better brand than you do.&amp;quot;  Like, Apple could buy Uber, and then do its own ride-sharing service, and brand that ride-sharing service Uber...  but they don&amp;#x27;t need to.  They&amp;#x27;re &lt;i&gt;Apple&lt;/i&gt;.&lt;p&gt;Any potential ride-sharing service that would like to build its own operations and the bootstrap itself to wider name recognition by buying Uber&amp;#x27;s brand won&amp;#x27;t be paying tens of billions of dollars.&lt;p&gt;So what&amp;#x27;s left?  We and Uber need to reform their own operations to make money, which is the exact problem that nobody thinks they can do.  What does their supposedly powerful brand get them?</text></comment>
<story><title>WeWork’s Back Is Against a Wall</title><url>https://www.wsj.com/articles/weworks-back-is-against-a-wall-11568733815?mod=rsswn</url></story><parent_chain><item><author>wayoutthere</author><text>You have a point; $15B is on the high side and I can’t defend it. But they do have a &lt;i&gt;brand&lt;/i&gt;, which is what makes an undifferentiated service like office space valuable.&lt;p&gt;I still contend that most of the value of Uber is tied up in their brand, and I think the same is true of We. I’m not sure either of their operations are all that valuable.</text></item><item><author>arbuge</author><text>&amp;gt; WeWork is probably legitimately in the $15B range&lt;p&gt;How do you arrive at that number?&lt;p&gt;I&amp;#x27;ve seen comparisons to firms like IWR &amp;#x2F; Regus that imply a much lower number would be appropriate, even if WeWork was as profitable as those firms (which it isn&amp;#x27;t even remotely... it loses money hand over fist).</text></item><item><author>wayoutthere</author><text>As has been called out by other analyses, the problem here isn’t really WeWork, it’s SoftBank. They thought they could run a pump-and-dump like Goldman did with Uber, but sorely misjudged the market’s view of WeWork.&lt;p&gt;WeWork is probably legitimately in the $15B range, but SoftBank has really tied themselves in a knot with such a high valuation paired with the downside insurance. They‘re in for an 11-figure loss no matter what, because liquidation preferences and huge losses scare off any serious investors they could potentially find.&lt;p&gt;My guess is that WeWork ends up getting massively scaled back and sold to one of its smaller competitors for under a billion. They’re just way too overextended to have any value beyond the brand.</text></item></parent_chain><comment><author>opencl</author><text>Regus has more locations, owns the buildings instead of subleasing them, is profitable, and is valued at 3.6B. 15B would be not be a sane valuation for Wework even if they weren&amp;#x27;t bleeding money at an alarming rate.</text></comment>