Morning Brief – WeWork: Nice work if you can get it- they can’t as it turns out…
SGM-FX Wed 11 Sep 2019
WeWork: Nice work if you can get it- they can’t as it turns out…
Goldman Sachs had previously advised a pre IPO valuation of $65Billion for the trendy hipster office sharing business. Smaller businesses have been struggling to find office space in all major cities worldwide as WeWork have relentlessly mopped up multi occupancy buildings. Anything less than 500square metres is now much much harder to find.
So far WeWork has burnt through USD 3 Billion and included in that for the first 6 months of 2019 has lost $690 million. Investors have politely told the pointy heads at GS that they must be re-enacting the 1969 summer of love and smoking mind enhancing substances to have come up with such a colossal valuation on a business of this size with such losses.
Result: new suggested Goldman Sachs valuation of WeWork now $20 Billion. Surely a valuation drop of more than two thirds and $45 billion must call for some explanation and calling for some heads to roll at GS?!
By the way we struggle to see how a valuation of 6 times earnings to justify a price of $20 Billion can be justified when competitor IWG trades at a multiple of 1.3 times earnings. Looks like more red faces at GS in prospect.
A new or rather an old in fact a very old take on stealing customers’ data: this time from Japan. In these days of hacking and phishing, it is refreshing to hear of a Japanese clerk doing it the old way: in the moments that customers used their credit cards and input their Pins for purchases in a shopping mall just outside Tokyo, the clerk memorised their details. In fact he managed this 1,300 times. After this feat of memorising 16 digit numbers, he made two purchases of handbags valued at Yen 270,000 or approx. USD 2,500 and was caught. How? Police were alerted due to him ordering the bags to be delivered to his home address! Just brilliant!
Discussion and Analysis by Humphrey Percy, Chairman and Founder
Click Here to Subscribe to the SGM-FX Newsletter
Related Insights
Daily Brief – POTUS in Kingdom of Saudi Arabia
Humphrey Percy
Wed 14 May 2025
POTUS in Kingdom of Saudi Arabia As one of POTUS’ travelling companions on this week’s visit, Larry Fink of Blackrock represents everything that a US President might want to burnish his credentials in the desert kingdom: head of the largest asset manager on the planet, hugely influential and totally credible. Just a shame that he […]
Daily Brief – UK Borrowing
Humphrey Percy
Wed 21 May 2025
UK Borrowing Another one for the pub quiz in case it comes up: UK government borrowing stands at £2.8 trillion or £2800 billion. While you digest that number over the chicken in the basket if indeed you are already in the pub, it will have increased by the time you get to the end of this […]
Daily Brief – The Art of the Deal
Humphrey Percy
Mon 19 May 2025
The Art of the Deal Today the UK Prime Minister will be announcing the fruits of his weekend labours after meeting the EU not as an accredited delegate but in a side session on the fringes of the EU Summit in Albania. What was on the table? Youth mobility, which is pol speak for 24-30 […]
