Skip to main content

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

Comments

Post a Comment

Popular posts from this blog

Spray painting Taylor Swift G650 aircraft (updated)

 First, a bit of paint will not harm anyone.  These climate activities are going to learn two things in the next few days:  (1) Trespassing at an airport is a felony almost anywhere in the world.  That means criminal prosecution.   (2) removing paint from an aircraft is expensive.   So these climate activists are about to find out the reach of the British criminal system and it will not be pleasant, the UK has very strict laws about that, I would be surprised if cleaning the aircraft of all the paint will cost less than $100,000.     I am sure that when they planned (premeditation) this little show they had a very valid logic to doing this.  Tonight, they are probably realizing the depth of their troubles.   I understand that in the UK it's a minimum one-year jail sentence.    Also, good luck travelling with a criminal trespass charge against you.  I am relatively certain that the airline industry will ...
Post a Comment
Read more

Tariffs on inhabited Island

 Two seldom-visited islands, part of Australia, saw a massive increase in the tariffs they will face when exporting to the United States.   The 32,000 residents did not have much to say...being Penguines.   NO kidding, massive tariffs were imposed on Heard Island and McDonald Islands.  According to the Australian government, the last visitor to Heard was about a decade ago.   Never mind the 47% tariff on Madagascar, where the principal export is Vanilla and the GDP per capita is less than $500 a year. Not only a Stable Genus but evidently an administration that took all of two hours to proof the list of countries.    They also treated St Pierre & Miquelon, two islands part of France in the middle of the St Lawrence Gulf...
Post a Comment
Read more

Britain, France and Egypt

 The voters realize now that the Conservative Praty desire to return to 19th-century dominance has driven its hatred of the EU.  The voters realize now that departure from the EU has accelerated Britain's decline and may soon make it irrelevant.  At best it will have to kiss American arses to maintain its standing.  For this, the conservatives were punished.  The decline of Britain was inevitable, competition from Frankfurt and Germany in Finance was bound to grow.  The core of Europe (aka Germany) is aging quickly Macron seems to be winning his bet, the left alliance that won the legislative elections will not remain united for long, since they disagree on about everything.   The Far right though it was about to assume power is once again relegated to the back of the bus.   It may draw its own conclusions, but not all of these are good for France.  The far-right has won nearly 1/3rd of the electorate, that is not something to be ig...
Post a Comment
Read more