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Now that WeWork is dying what does it mean for Uber and it’s friends

The WeWork valuation was always based on the greater fool. That these VC investors  would find a sucker (eg the IPO market) to make them whole!  Because there is simply no logic to the WeWork valuation. It was already the single largest tenant in NYC and a substantial player in many other capitals, and yet it was very far from showing profits.  The operating losses for WeWork appear to have been almost greater than its total revenues

So the likes of SoftBank decided that the best option was to treat WeWork as if it were a tech company and not just a real estate play (and a not very interesting one). Leasing office space and then subleasing it to small companies... it’s hardly groundbreaking.

So what’s the fall out?  First it would appear that WeWork is on its way to bankruptcy since I doubt that the VC will pony up more cash. I suspect that the shares of IWG (holding company for Regus, WeWorks main competitor) will take a hit. They got a nice boost from the WeWork IPO rumours

What else?  The 2019 tech IPO market had been a bit of a disappointment for investors that saw few first day bumps and a lot of declines. So rights issues will be difficult at these lower valuations. Most of the players have already substantial debt burden so that’s out too. So I would guess that for a lot of tech company the future looks like less growth more cutbacks, less fun, and a real push to generate profits!

This is probably the future of all these disruptors. They will have to focus on their bottom line. Uber great for the world traveler was that the application worked for México and China, but what percentage of the Uber users actually require this feature?  Could local (or regional players offer the same features)

I attack Uber but what I say here applies to many other players who face the same problem that tech companies did in 2000, you still need to generate profits or at least not lose money if you are going to survive!

Both Google and Facebook found their revenue stream after their IPO, but they did find their revenue stream and we actually tech companies offering something new to users, and the end of the day Uber is a taxi company with a cool App

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