Pretty good article that sums up all of the problems related to WeWork (IPO expected in September). Here's my tl;dr (although don't quote me one it):
- Uses an 8.2% discount rate on it's long-term lease obligations while IWG (it's closest competitor) uses a 3.7% discount rate. Huge red flag as it effectively understates the liabilities (we're talking billions of dollars).
- IPO underwriting group (JPM, UBS & CS) alose extended massive personal lines of credit to Neumann. Creates an interesting conflict of interest because if the stock does poorly at the IPO and then there is a margin call, the banks would be forced to sell Neumann's pledged shares.
- Re-iterating the corporate governance mess (dual-class shares, self-dealing, family involved, etc.).
- Still trades at 15x the valuation of IWG for no apparent reason.
Submitted August 27, 2019 at 10:07PM by Digitking003 https://ift.tt/2PgYPyY
