bear hypothesis: wework is an overhyped-regus with a frail capital structure, no scale or network effects, and dangerous liabilities. it will likely collapse during a recession.
questions for investors:
1. how much flexibility/escapability does wework have regarding leases and liabilities? in particular, how much control do they have over cash flows to avoid disaster during a recession?
2. how much does it cost and how long does it take for enterprises like cisco and ibm to open new offices: (1) with wework; (2) with regus or another wework competitor; and (3) without any outside assistance? how about for companies with 100-1000 employees?
3. what is the current breakdown, lifetime value, and retention rate for wework members among solos, startups (2-99 employees), mid-sized companies (100-1000 employees), and enterprises (1000+ employees)?
4. cashing out $700mm seems like a red flag if you believe the company is worth much more. what percentage of equity does this represent for the founder? is cashing this much out normal for large IPOs? by comparison, how much did zuckerberg, hastings, and bezos cash out at IPO?
question for others: what are the first questions you would research on wework?