WeWork’s business, essentially, aims to capture the spread between long-term and short-term rental costs. Landlords want stability and guaranteed cash flows, so they’re willing to lease office space at lower rates if a tenant is willing to make a long-term commitment, as WeWork does. Companies, on the other hand, want the flexibility of short-term leases that allow them to quickly grow, shrink, or move their office space in response to personnel needs. As a result, they’re willing to pay higher rents for this flexibility.
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All of these factors – the dual-class shares, conflicts of interest, and unusual relationship with underwriters – suggest that this IPO is about Neumann and other insiders cashing in on the bubble-like valuation of WeWork’s shares and dumping the risk on public investors.
via https://seekingalpha.com/article/4289610-wework-one-worst-ipos-2019
Flying Upside Down 