WeWork and another pesky IPO
Avid followers of the '5 Minute Tech Break' may recall us previously recommending a book called 'Disputed' ... subtitled "My Misadventure in the Startup Bubble" ... where the author documents with some humour and sharp penetration, his time aboard the Hubspot project en route to their IPO.
It's fair to say that the book is not wholly complementary, essentially claiming that the IPO road map is built to maximise exit money for founders and VCs, not to deliver any great value to the market.
That book always returns to mind when I hear news of the latest rush to IPO, enter those fine folks at WeWork.
To those unfamiliar with WeWork, it is a co-working behemoth that's tried to take over the world. Their rush for expansion, despite huge losses, was only ever a rush to one place, an initial public offering and who would have thunk it ... on Monday, the company confirmed in a press release that's where they're heading.
No-one can doubt it's been a 'success' on paper, valued at $47 billion in January 2019, they did have a stumble recently when a Japanese telecom giant pulled out of a significant investment.
This might be based on the fact that despite revenues of $1.8 billion in 2018, their net losses hit an astonishing $1.9 billion.
Are they the latest and worst example of over hyped and over here? Part of an IPO stampede that always delivers a handsome return for existing stakeholders, but rarely for new ones?
And they don't even serve free beer anymore ...