Several articles in the past few weeks have scolded WeWork CEO Adam Neumann and the investors who followed his story.
The Wall Street Journal was the first to describe Neumann’s odd behavior and published another article, “WeWork Investors Turned Off by ‘Sloppy’ IPO Filings.” The recent article explains one problem in the filings (shown below):
“A section headed ‘illustrative annual economics’ that assumed 100% workstation utilization vanished, for example, as did two graphs portraying a typical location going from ‘-$’ to ‘+$,’ with no y-axis showing the actual dollar amounts being depicted.”
A New York Times article, “Was WeWork Ever Going to Work?” criticizes investors for missing obvious problems with the company’s initial business plan, such as the reliance on start-up revenue when most entrepreneurial ventures fail. According to this report, it took people finally looking at the data to realize how much We is losing and how hard it will be for the company to succeed.
The article includes other examples of investors’ blind exuberance:
“It is not merely money that separates the ruling class from the rest of the country. Often it seems as if it is the gaping difference in the application of common sense. Ultimately, it was the bankers, technocrats, statesmen and acolytes of the data-junkie class who were willing to believe that Elizabeth Holmes, a 19-year-old college dropout who thought a black turtleneck would make her Steve Jobs, was going to revolutionize blood-testing. It didn’t seem to matter that she could not deliver any real evidence to prove it.”
An Inc. article, “The Future of WeWork: Leaner, Humbler, and Duller,” suggests a new path for We. The author suggests less hype, fewer employees, and more discipline for the company to survive.
Who do you blame for WeWork’s failed IPO?
If you believe the New York Times article, investors are gullible. Do you agree with this assessment? If so, why might this be the case?
Read the “Note”—the fine print—under the table, shown above. How do you interpret this information?
What should We do now to build credibility and save the business?