WeWork announces 1-for-40 reverse stock split to retain New York listing::US office space group recently warned it faced ‘substantial doubt’ about ability to continue as a going concern
Now, I’m not as smart as the refined folk at the FT, but I think the word they are looking for is “merge”, not “reverse split”.
You’d think, but in fact that is what it’s actually called in the financial world.
Well don’t I look foolish!
finance is full of that kind of terms that would even be goofy if they weren’t that misleading.
when the economy contracts very often is called ‘negative growth’.
It’s because broad adoption of the existing term -> fewer misunderstandings if you just use a variation. Anyone with even passing knowledge of stocks has heard of splitting. The inverse is so comparatively rare that the term wouldn’t be widespread enough to be as immediately understandable as the (admittedly dumb sounding) reverse split.
In part because stock merge could feasibly be multiple things. Stock share merge is more specific, but that’s three words that don’t flow very well rhythmically. A reverse split can only be one thing and is the most layman friendly.
Merge implies more than one company merging together to become one, which I’m guessing is why we have the term “reverse split”
What idiot invests in WeWork?
Softbank
Not exactly sure why WeWork is in such trouble. It’s a growing and attractive industry after the pandemic, and several competitors are doing very well in the current market.
They are overpriced, and have no real value except in very niece situations. This video explained it pretty well I think: https://youtu.be/IiO9eSd_v4E?si=8jh404sxNtFqLhIk
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Thank you very much.
I agree with you and I’ve given this a lot of thought over the last year or so. I think the problem is that the need for shared/rental office space isn’t in the big cities where WeWork has its locations, it’s closer to the suburbs where the people that WFH live. The folks that WFH who either don’t have adequate space in their home or prefer to go to an office to work would consider a rental office space but don’t want to have to commute into a major metro area to work. The office space would need to be closer to where these people live and offer a shorter commute than going into your company’s office.
In my area I see a lot of vacant commercial space in areas like strip malls or “main streets” that would make great co-working spaces. These are likely cheaper to lease and are closer to where people live making the commute manageable. As an added bonus it could have a positive effect on the local economy (coffee shops, lunch spots, etc.).
People in suburbs often do have the room for a home office though. And if you prefer to go to an office, it’s probably to work with your coworkers. No chance they want to drive to your suburb.
The people in the city that live in a 1-2 BR apartment definitely don’t have room for home offices.
The real problem for wework is it’s an insanely easy model for LLs to copy and disintermediate them. If it were worthwhile business.
It’s much too expensive at any scale - and subscale, well, people outgrow it.
I don’t know the company’s finances, but my guess is the concept can be successful, but WeWork may have taken on too much debt or over-extended itself in its rapid growth period.
A company that is expanding more strategically and with an eye on the bottom line might end up doing fine.
Competitors such as?
For example IWG and Industrious.
Very interesting. Thanks!
