Yes, we’re obsessed. And how can you not be with #longform pieces like this on the company. Choice bit,
“‘Adam’s explanation for the valuation of WeWork speaks for itself,’ said Chris Kelly, co-founder and president of Convene, a company that offers flexible event spaces and is backed by major real estate firms. ‘This is not an Excel spreadsheet calculation. He believes there’s an energy behind the brand, and he’s gotten people to invest at that valuation. He has not tried to explain it in traditional financial terms.’
Indeed, to assess WeWork by conventional metrics is to miss the point, according to Mr. Neumann. WeWork isn’t really a real estate company. It’s a state of consciousness, he argues, a generation of interconnected emotionally intelligent entrepreneurs. And Mr. Neumann, with his combination of inspiration of chutzpah, wants to transform not just the way we work and live, but the very world we live in.”
A state of consciousness. A state of effing consciousness. Being a biglaw associate is also a state of consciousness but that doesn’t necessarily mind-port you to partner after 8 years, let alone 12.
“Whether that’s a $20 billion business, however, is a matter of contention. Companies specializing in shared office space have come before. As The Wall Street Journal noted this fall, the office-leasing company IWG manages five times the square footage but has about one-eight the market value. Even Adam Neumann, a co-founder of WeWork and its CEO, admits that his company is overvalued, if you’re looking merely at desks leased or rents collected. ‘No one is investing in a co-working company worth $20 billion. That doesn’t exist.’ he told Forbes in 2017. ‘Our valuation and size today are much more based on our energy and spirituality than it is on a multiple of revenue.'“
We’re sure bankers all across the world will be happy to add “energy and spirituality analysis” to the lineup of valuation methodologies like precedent transaction, comparable company and discounted cash flow analyses. What the bloody hell.
But, wait, back to the New York Times:
“If more strangers are colliding by the grapefruit water, the thinking goes, they are more likely to meet up and invest in one another’s socially responsible start-ups, and then the world will be a better place.”
Hahaha. What?!?! We were in New York last week and collided with a lot of strangers on the subway and, suffice it to say, no deals were cut and, as some dude danced on a pole, nearly kicked Nancy in the face, and a dodging Jonny spilled over into the lap of a homeless dude, the world seemed like a pretty sh*tty place. But maybe that’s because the subway car we were in didn’t have retail, free IPAs, or J.Crew threads.* Now that we mention it, maybe it should. Like the Amtrak cafe car. Brilliant.
Anyway, finally, this is obviously not investment advice (clearly, of a private company), but this:
* As for J.Crew, the WeWork partnership may actually be a great move towards injecting some life into the sleepy brand.