WeWork - Credit to CharlotteSt.

Embrace the Hustle! Neon sign at @wework 

So basically this is what we know about this charade so far, i apologise in advance: 1. Its not a technology company in any way, shape or form. No income is derived from the sale of a product or service delivered by a technology. Adam and Miguel claiming WeWork is a technology company is one of many indications that illustrate how they intentionally seek to defraud existing and potential future retail investors. 2. When asked what inspired him to create a shared workspace company, Adam said that when he was growing up in Israel he used to live in a Kibbutz and was so mesmorised by the sharing ideology that he invented Co-Working. Regus was founded in the 1980’s and LEO, Workspace Group, The Office Group, ServCorp and many many others were around way before Adam thought up of this fraud. 3. WeWork post full year invoices for the year ahead this year inflating their revenues. They then heavily discount the invoices they’ve already raised and treat them as an expense. They then pay whichever broker secured that lead 100%, yes 100%, of the contract value. Neither the discounts or the 100% in commission payments appear in their Financials as they are ‘community adjusted’. Note the industry standard commission is 10%, and imagine, they’re still struggling to find customers. 4. Adam & Miguel have already collectively cashed out in excess of $1bn in loans, royalties and who knows what other instruments (e.g. selling WeWork IP he acquired personally for less than $1m back to WeWork for $22m), they’re chilling, and reportedly less and less involved in the day to day running. Miguel is more involved in a range of other businesses and has already demoted himself from Co-Founder to Head of ‘Global Culture’, quietly positioning himself for a quick exit post-IPO. Adam on the other hand fancies himself as the next Masayoshi, he has his own ‘venture capital’ firm investing in genuine entrepreneurs. Why would either of them care what happens to their remaining holdings, they’ve already swindled enough to set up their grandchildren for life? 5. Then Adam + Miguel used that very income swindled out of WeWork through an array of multiple jurisdicted tax havened entities and diverted it to their privately controlled investment vehicles to build up real asset rich portfolio (not a short-term asset-light fraud).... 6. .....It doesn’t end there, they then lease those very buildings purchased using their loans back to their own ‘spiritually’ valued WeWork unicorn at a ridiculously lucrative high yield. Even the very founders are bleeding their own Ponzi scheme dry. Are these guys something or what. 7. Then when they got caught, Adam tried to justify it by claiming that they bought the buildings years ago as a way to prove the concept works to landlords. An outright lie. 8. The only reason why its valued at $47bn is purely because one chap in Japan bafflingly and solely invested a total of $12bn, in 9 separate funding rounds, each at double the price (and valuation) he (and he alone) paid less than 12 months prior. Since Softbank first invested in 2012, nobody else has invested (not including shares Adam and Miguel may have quietly dumped privately). The only two people who claim WeWork is worth $47bn are Masayoshi Son and Adam Nuemann (and of course Henry Blodget, a permanent fixture at the famous hedonistic WeRetreat festivals, the monthly candy-fuelled all expenses paid festivals (courtesy of Softbank). As long as we’re debating, and continue doing so until after the IPO they’re loving it. No media outlet, for reasons Im not too familiar with, are willing to just come out and say it, and thats their advantage. 9. Why would Masayoshi, an evidently highly intelligent individual, would invest so many billions into this plain as day fraud? For the life of me I cant figure it out. Maybe it really is as simple as it looks, its impossible for him to sell his shares on the secondary market or post-IPO for $100bn+ if he didn’t allow Adam and Miguel to parade WeWork to the press as being a $47bn company, using purely his 9 sole investments and revaluations. Once he exchanges, media outlets can run headlines that project an aura that the company is indeed worth what two people have decided to value it at. It seems to be as simple as that. Everybody in the loop benefits, from the early investors that hope to offload their investments to later stage mugs, media personalities like ‘journalist’ Henry Blodget who must have earned at least $10m from WeWork in PR related income to date to the Goldman Sachs and JP Morgans who earn hundreds of million in share sale commissions. Everybody wins. No one is accountable. 10. They have raised a total of $13.7bn ($12 billion from one Japanese investor alone poor chap) and cannot show (even whilst using all their financial trickery and groundbreaking new accounting principles) manipulated revenues of 10% of that. 11. Co-Working as anybody in the industry will tell you generates almost as much of a yield as your traditional commercial leasing agreements. These days everyone provides serviced offices and co-working, even British Land is getting in on the mix. Cafe’s and Hotels too, especially those catered to Business Travellers. Even brokers are building their own platforms where they act as an operator, Instant Managed, CBRE to name a few. Its like the hotel industry only many times simpler, its just desks, chairs, simple decor (plants and art.com picture frames) in common areas, wifi, electricity, cleaners, plates and cutlery, and if you want.... a voip plug in handset. It used to be highly profitable because there were few half decent ones around but today they’re everywhere and desk prices have collapsed whilst conventional leasing agreements have held steady. They’ve risen in the most sought after locations most suitable for serviced office centres. 12. WeWork even thought about setting up WeCafe’s, they want to be the first ever to disrupt the working in a ‘coffee shop as a service’ space. They weren’t aware when they first launched in 2010 that people can work in cafe’s where amazingly they get a free table and a chair and even wifi for the price of a cup of tea. If WeWork actually charged their members a fraction of the market rate, half will vanish overnight. 13. One brief search on any review site should show you the extent to which they couldnt care less about what their customers think or for providing any type of quality orientated service. They also seem to have a habit of charging even after you’ve vacated. 14. The earliest shareholders including a gentleman called Mortimer Zuckerman were not just their landlords AND seed investors. They also happened to own Fast Company and NY Post which were instrumental in propping up WeWork in the press. The headlines they spun about WeWork’s valuation and ‘meteoric’ rise was basically the shareholders advertising their investments. 15. WeWork has spent more on Public Relations (mainly towards Henry Blodget, a permanent fixture at the famous hedonistic WeRetreat festivals, the monthly candy-fuelled all expenses paid festivals courtesy of Softbank) that give the impression the company is a roaring success, they pay for much of these articles. Every week they pay media outlets like Business Insider, Forbes, Fast Company etc to write sensational headlines like ‘The Rise of WeWork’ and ‘How WeWork become a $47bn company’. None of which give you actual metrics, just the founders utopian cringeworthy marketing gobbledygook. As any swindler will tell you, image is everything. .... I havent finished... 16. He hasnt achieved any of the metrics he set out to achieve in the original investor pitch book presented to investors (available online) which not surprisingly never even included the two largest costs of marketing and fit-outs (because he claimed landlords will front these costs) from the financials so as to inflate the percieved profitability. 17. WeWork invented its own now infamous Community Adjusted EBITA accounting principle which substantially masks the true losses of the company, without them they would have to post losses in excess of $4bn+ 18. If you are not already acutely aware that Adam Neumann and Miguel McKelvey are fraudsters, count the number of times the word ‘Hustle’ is plastered in Neon lights at every one of their tacky ikea-designed offices (or just google the words: wework hustle and click on images). 19. Employed his whole family, three cousins in Tel Aviv, his brother the Chief ‘Wellness’ Officer in New York, even his wife, who is very much looking for recognition, persuaded Masayoshi to sink $100m into her own Ponzi Scheme too, WeGrow, the ‘future of education’. 20. Two profitable serviced office groups, the largest IWG and the most luxurious LEO, who collectively manage in excess of 3000 centre’s have been on the market for close to 2 and half years now and they haven’t been approached by anybody willing to pay a multiple of more than 1.25x revenues. 21. When asked whether he was on crack when he sat down with Mayahoshi and they both valued their investment at $47bn, he replied ‘"No one is investing in a co-working company worth $20 billion. That doesn't exist. Our valuation and size today are much more based on our energy and spirituality than it is on a multiple of revenue.". 22. When Miguel was asked about their $20 billion valuation (before it was almost tripled to $47bn), Miguel McKelvey answered ‘Who gives a s***?’. WeWork will never, ever, in its short history generate a profit, let alone the $5/$8 billion in profits it will need to justify its $47bn valuation. A lot of people could have done what Adam Nuemann and Miguel McKelvey did, they don’t because they’re not prepared to engage in a fraud. They can play dumb all they like but when you’re fiddling with your financials, inventing accounting principles, marketing yourselves falsely as a ‘tech play, cash out close to $1bn, employed your whole family from your brother, your second cousins to your wife, the Strategic Thought Advisor, all on fat salaries etc, etc...please for heavens sake don’t try and convince me that they are unaware of what they are doing. They know exactly what they’re doing. Adam and Miguel purposefully choose to hide those metrics in ‘Community-Adjusted EBITA’s’ and other financial jargons. Why are they still parading WeWork as a technology company, does anybody believe that as cunningly intelligent as they evidently are, that they genuinely think WeWork is a ‘technology’ company? Why on earth would they have already cashed out, and not just a few million dollars to get a mortgage but hundreds of millions to buy commercial buildings that they used to further bleed their own Ponzi Scheme with?. Imagine, they have cashed out an equivalent to roughly 62% of their revenues, whilst they post bricks and mortar losses of more than double that. This is why you can confidently say that Miguel McKelvey and Adam Neumann are knowing engaging in a fraudulent Ponzi scheme and are nothing more than your average, traditional run of the mill fraudsters and swindlers, or in their own words....Hustle’s. Now they hope to defraud the big boys on the US Stock Market, and they will most likely get away with it. The most discomforting element of this whole deception is that after perpetuating this fraud for so long, media outlets are now inviting these fraudsters to media-sponsored ‘leadership’ events where they’re put podiums to teach us how to be visionary’s whilst they have now made it unnecessarily more difficult for genuine entrepreneurs to raise capital in future.