by: kleinbl00 · 813 days ago
I mean, do you really need to see the article?
- The New York-based company recently hired brokerage firms JLL and Newmark Knight Frank NMRK 9.52% to negotiate rent relief or convert lease deals into profit-sharing agreements in a bid to drive down its fixed monthly expenses.
WeWork is among a growing number of U.S. businesses that are skipping out on rent payments as companies look to preserve cash ahead of what could be a long economic downturn brought on by the pandemic.
WeWork’s push to lower its rent costs and switch leases to management agreements started long before the coronavirus outbreak. The shared-office provider came close to running out of money after a failed attempt at an initial public offering in the fall, in part because of its massive real-estate expenses.
Following a bailout by SoftBank Group Corp., 9984 3.92% WeWork had $4.4 billion in cash and cash commitments at the end of 2019. While its U.S. locations are still open, many are mostly empty as large parts of the economy remain shut down.
The company’s bonds traded at 37 cents on the dollar as of Wednesday, down from 90 cents in late February.
WeWork isn’t treating all landlords the same: While some say they have been paid, others say they are still waiting for their checks.
“WeWork believes in the long-term prospects of our locations and our relationships with landlords across the world,” a WeWork spokeswoman said in a statement. “Rather than implementing a companywide policy on rent payments, we are individually reaching out to our more than 600 global landlord partners to work in good faith towards finding asset-specific solutions that benefit all parties involved.”
by: kleinbl00 · 1009 days ago
Remember - they have to IPO or they default on a shit-ton of loans.
- The steps are widely being viewed as an effort to get the company back on track for an IPO, though it remains unclear when a public offering would take place.
According to the WSJ, WeWork had $2.5b in cash as of June 30 (its own travesty). WeWork burns $700m a quarter. And WeWork has to keep $500m cash-on-hand or it defaults on bonds it sold last year. So it's gonna be straight-up outta money oh, March-ish.
That G650 they're gonna sell?
Yeah they burn through one of those a week.
by: kleinbl00 · 1012 days ago
- Generally speaking, Softbank’s model is to manipulate private capital markets as a way of drowning out competitors with cash. For instance, there were several ‘rounds’ of WeWork investment where Softbank was buying more shares at higher valuations. WeWork ostensibly became more valuable because Son said it was more valuable, and bought shares for higher prices. And since there was no public market for these shares, the pricing of the shares was totally arbitrary. WeWork then used this cash to underprice competitors in the co-working space market, hoping to be able to profit later once it had a strong market position in real estate subletting or ancillary businesses.
Adam Fuckhead has stepped down, of course. the new crew is "cleaning house." Effectively they're murdering everyone; when you're doing "thousands" of layoffs and you only have "thousands" of employees, shit ain't great. If I had to venture a guess they're gutting the thing to IPO at any cost because if they don't IPO, a lot of the money they've sunk is in default.
As always, it's who you know. Adam Fuckhead is Gwynneth Paltrow's brother-in-law, and Goop has a $250m valuation.
by: kleinbl00 · 1162 days ago
People make fun of Pets.com. They were obviously doomed. Nevermind that Amazon initially owned 50% of Pets.com. They pulled in 620k in revenue their first year and spent $12m on advertising so obviously they were doomed. They raised $82m at their IPO and were doomed. They were losing $3 for every $1 they brought in because they were trying to make money shipping pet food which has a single-percentage-point margin.
I mean, that's stupid. Clearly, obviously stupid. But WeWork rents space from one group and leases it to another and loses $1.80 for every dollar it brings in. They're middle-men whose value-add is clearly giving you all the stuff you would normally pay double for. I mean, fuck - who wouldn't want to get $800 worth of office space for $400? Other than the people trying to pay the mortgage?
Softbank was going to shovel $16b into WeWork. Instead they're shoveling $2b. Masayoshi Son, founder of Softbank, also piled $130m into Bitcoin in December 2017 which, okay, but he also sold it three months later.
Who wants to subsidize hipster rent?
by: kleinbl00 · 1274 days ago
Note the dumbasses already opted to give WeWork $8b. That's eight.billion.dollars. For a company that acts as a tenant in big spaces so that it can be a landlord to serfs.
by: mk · 1021 days ago
by: demure · 1224 days ago
This issue of the NYT Magazine is rather good.
by: kleinbl00 · 1364 days ago
So. In case you were wondering, Softbank is the bagholder. Meanwhile, Sears, which actually sells shit out of buildings they own is going bankrupt.
by: dublinben · 854 days ago