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You're either the biggest idiot or the biggest shill, either or you can go piss off

your analysis is moronic

He has absolutely no sense of self awareness

Love the way he says But just wait WeWork is just getting warmed up Yeah We know the story

ted Human beings tend to put a higher value on an enthusiatic presentation that makes them feel good than a presentation that is analytical and frank about the flaws underlying something. The title of this channel shows where their priorities lie - it’s similar to the word entertainment which is about making large audiences feel good (as opposed to figuring out what the truth is). Of course maybe this style of presentation works better when you are trying to raise money from ignorant investors - something Mr Neumann was very good at.

He's really pretending that WeWork was a new idea? It's hard to believe that this video is in good faith. Companies have been doing that for decades. Did WeWork pay him?

Lmao. More like WeScam.

Worthless is right. When looking at the growth phase he completely fails to even attempt to distinguish solid cash flow from hype. Without that cash flow, regardless of your industry you are nothing. The bankruptcy courts are well sprinkled with the bones of those who expanded faster than their cash flow could keep up. The cause was always the same - too much debt followed by no period of pause to allow for an income catch up. Any idiot can grow fast if there is enough borrowed money around. Growing on the basis of sales is harder which is why it doesn't happen too often.

Scott Humphreys lol I know for a fact they did not

I hope, you can give them $100 billions. They can be profitable. ...... in the next universe?

Neumann: "Our company is losing $200k per hour but it's a tech company (it really isn't)." Softbank: "Awesome, here's $7 billion!"

Exactly. Something starting with "Boy, I was wrong"...

Yes.... i hope he follows up

Yes, you're correct. However, if Hillary would be a president, she would allowed for child porno & new interns getting ..... Then old reach guys would pay lots of $$$ to rent their offices. So it can still work. JUST ELECT DEMOCRATS & PROSTITUTE YOUR OWN DAUGHTER. FINALLY, SHE CAN PAY OFF HER STUDENT LOANS. WHAT CAN GO WRONG?

Peter Grillet great analysis. Would love to follow more if you have advices where to invest

@@cassiap1 robotics, specially medical robotics. Good luck. Stay away from China. China Hustle.

This reply aged really well.

Definitely need to order that book.

Anand Prahlad The latest development in the wework saga proves you correct. Wework may function only as a cautionary case study.

Agree

Send an email to their investors. They have to smarten up FAST or be ruinned.

Call a Polish, Romenian or Irish handyman. Substruck from your rent. That's what we do in the USA. Things change right away. Good luck.

My team is in starbucks not a wework office

Bingo!

the model is vulnerable to being a scam

Greetings from the recession of 2020. Yes, the model is very vulnerable to a recession. Even without considering it was a scam.

I couldn't agree more hahaha. Tom seems like the kind of shill that would tattoo all those corporate logos on his face for a dollar each

Can we hear Damn one more time ?)

Fast forward to the beginning of 2021 and I think another DAAAAMN! is in order.

Leo Schmidt yep, feels like the money is too keen to jump on the next uber train not realising the simple concept isn’t easy to do well. I don’t think this company will be growing 5 years from now.

thats what the guy i believe was kind of implying in the video but if there is a recession im sure wework will come back at the landlords and simply say, ''we cannot afford the rent anymore, we can either close down the subsidiary OR you mr landlord can lower the rents'', i have no idea if landlords will go for that

It just exploded

They can't imitate WeWork because it's not even a new idea. WeWork is an imitator.

Get Leo on this show. Fire this idiot Tom who doesn't even do basic analysis

Any proof?

he said it in the video lol

@@gshah921 no he said their rent obligations per year are about 2-3 billion i believe, with similar revenue numbers.

It won't be profitable. Wework will cease to exist

$40 bill now

Why?

because of jealousy

@@arifgunawan9329 it's so funny to read this now 😂

it burst because people knew this was a scam.

great call, Arif

We will see what happens. Thanks - Tom

Valuetainment Thanks Tom, you are the mentor I never had.

The opposite - most companies rent fancy offices that are too expensive for their current revenue streams. So they would downsize to WeWork if they run out of cash. You get a prestigious address in Manhattan for the fraction of the cost of a high-rise.

You stop paying rent and then lose no equity and leave with all your profits. Economic downturn is the reason you rent...

@@VALUETAINMENT Very soon btw :)

We work owns no real estate, owns zero assets, they only have signed leases of perspective future commercial renters. Sounds like BS like AirBandB. Can you say ponzi.

itillbeme1 Uber and all the other popular ride sharing companies don't own the cars. Ebay doesn't have any warehouse it's just a platform that allows people to buy and sell. Do you see a future where ride sharing companies won't exist? AirBnb has millions of listings all over the world no hotel has that reach. I don't think you see the value & convenience these businesses provide.

More value for those who want it.

Same. Most people like dumb stuff

No surprised. It's a niche channel catered mostly to people who are into business new and information or at least interested in entrepreneurship.

Good call.

renting or owning, the business is indeed extremely vulnerable even to a slight downturn. The reliance of volatile customers, themselves EXTREMELY vulnerable just make this an unstable concussion

Buying properties might reduce their flexibility. Also, a property might have to be renovated to meet the demands of their clients. The company also has a lot of debt which makes it hard for them to raise the capital to buy these assets in the first place.

Agreed!!! Or how about a REIT where they don’t have to cough up the money instead, outside money is used and dividends are paid to the beneficiaries. Also, equipment as in furniture and appliances are a big part of their expense so instead, a second furniture/appliance leasing company should be created and they can control how much they are willing to expense to offset tax liabilities each year.

They rent long-time, 5-15 years, and explode the per square foot revenues. That's the idea. However, they should IMHO do a sharing economy model like AirBnB, or sell franchises and get a cut of the profits. The whole idea is to 5x or even 10x the per square-foot revenue. At this point, you don't really care if some customers go away, and their "hot desks" means customers can roll indefinitely without issues. I know a guy who turn 13000 a month from properties that would otherwise be way less profitable with this very technique. You get people to rent a tiny tiny portion of it for the community and the atmosphere. What I mean is, the cash-flow is insane, because they pay the mortgage based on the size of the space they rent... and they sub-rent each desk for 300 a month. Just think about it. Like retail stores, not real estate. Just how much revenue are they bringing per square foot??! Let's say a desk is what, 4 square foot or so. That means 75 bucks per square foot, right away, no need to sell any products. They pay what, 3-10 bucks/square foot to rent a basic space like that. Unreal. Obviously they can't cover all the space with desk, but then they solved that problem with the "hot desk" idea, where people pay to sit where they can, basically. I mean, once you get it rolling, you gonna make in the multiple hundreds % of profit margins. There is very little maintenance compared to a retail store. No need to hire much employees (if any). No need to manage any stock. No need to sell any product...!! And if a recession hit, guess what? I personally guess, that all their clients will go away... *only to be replaced by who?* All the people who could afford their own space before the recession! The clients rolls so easily! There are solid reasons with Soft Bank valued this at 47 billions. OK, it's over-values, but it's an insane profit machine!!

Let's say 8 square feet for the desk actually, so they bring in 37,5$/square foot. If they pay 10$/square foot, that's almost 400% profit margins. Tell me again how that's not profitable.

South Hill Farm thanks, I was over the whole sheep convos. As a investor, I could care less about the hype.

I tend to agree. I live near the Hollywood location of their for lease offices and ever since their opening almost six years ago they have always been completely empty - and I mean always, no matter what time of day. To me this doesn't seem anything else but a money laundering Ponzi scheme based on erroneous valuation of demand in commercial real estate.

That's completely different. They don't offer lease for offices... they offer a co-working space. An atmosphere. Think about it in terms of retail instead of real-estate : way to bring people in to make as much per square foot revenues as possible. They create an atmosphere, a network, a community. So people pay 300 bucks a months for what? 8 square feet of space? That's 37,5$/square foot of industrial space. Let that sink in. This is a whole other world of profit margin right there! Don't think about it in terms of real-estate. Think about it a little bit like, you know, the Apple Store. Only you don't pay employees, you don't have to sell any product, and you don't have to keep any inventory. Their secret is, again, they don't offer an "office". They offer a *community*. That's different. No one is willing to pay 300 bucks/month for the space of a desk. That's a complete rip-off. People are willing to pay for a *community*... just about any price they can put up with! Real-estate people need to be more creative. Maybe I'm wrong, but time will tell.@@24hourtourist

Sure, time will tell. Meanwhile, We Work has started to buy some of their buildings and they actually violate sound business practice (never mind real estate business ethics) They can call themselves what they want but a tech valuation scales very differently. This youtube channel (amongst several) agrees: kzfaq.info/get/bejne/et1xrLiHm864lmw.html

smart people here... The issue is because of the way they presented themselves they got a valuation in the software valuation realm. That turned out a mistake.

Yup. the company is now called WeBroke

Yep i saw there prices also and are high ....

WeWork and coworking as a whole won’t work with teams of more than 5 unless they cut you a deal. WeWork charges per person plus extra for meeting rooms. In London a team of 20 pays 20k pm plus at least half of that in meeting room credits (given you meet clients). An office for 20 in central will be around 3-5k pw so 12-20k pm and you can usually negotiate better deals. Other coworkings charge 500 per person pm which comes at about the same as a well negotiated private office. It’s cool to have free beer on tap and free unlimited coffee as well as meeting other companies, but the costs don’t really justify it. Re the office supplies argument, most office spaces come furnished already and coffee machines aren’t expensive really.

It's expensive here in London too. I had a client who was given a quote to cater to his 7+ team in the shared space, he couldn't believe the cost. My client ended up getting a private office literally across the road for less than 2/3 of the price. (I mean literally across the road. We used to have our meetings in the WeWork shared space so we could have free drinks.)

True.

Thank you very much for such a nice comment. I can see that you were paying attention to many things in life. I very much appreciate people such as you. Thanks - Tom

diggleboy they make people think they are meeting their needs, 2. People in Barcelona need to pay 990€ for an.office when they can get the same on a street private office, where they can have full privacy and control, is the marketing at work, no real added value, just ilusion

Carlos Loff, With Wework they don't have the hassle to find a place + they don't have to buy all of the office supplies ( setup all stuffs, desk, coffe mach...) etc. etc... + You can get a place in the center of the city ( even small office places in the city costs than 900€, especially in Barcelona)

Valuetainment What is with the RBS logo? Looks like one of those shirts where he worked on the trading floor.

U still have a job? NO I DID NOT THINK SO. SORRY ABOUT IT. MATE.

How did that work out for you now??

PolskaWalczaca hahahaha oopsies

Why are you concerned about Longevity? If they go belly up you move. It's just a place to go to, plug your computer in and go. If it doesn't work out go get a Regus office same concept but more established.

@@johnwayne2103 for my purposes I don't care of they close. In hindsight I should have made that a separate paragraph. That should clarify everything right?

Great to hear - glad you got something out of it!! Thanks - Tom

Awesome - thanks for adding your personal feedback. Thanks - Tom

Honored by that!!! Hopefully your faith is recorded with great content. Good suggestion, we appreciate it! - Thanks Tom

Dan Willis its in the description

SWEEET!

Thank you for sharing the real time experience. We appreciate the authentic nature of your comments. I don’t think it’s the same rates in every city BUT you are giving us absolute proof of your real life experience and that is going to be helpful to a lot of people. We also thank you for being a loyal viewer. Thanks - Tom