WeWork at it Again: Loses $3.2 Billion, Plans to Go Public via SPAC

To be honest, the WTF SPAC bubble wouldn’t be complete without a WeWork listing that lets SoftBank get out.

By Wolf Richter for WOLF STREET.

WeWork is at it again – or rather SoftBank, its primary investor and bail-outer. WeWork disclosed in documents shown to prospective investors that it had lost $3.2 billion in 2020, on top of the $3.5 billion it had lost in 2019, for a two-year loss of $6.7 billion, and this isn’t a net loss under GAAP, but based on adjusted earnings before interest, taxes, depreciation, and amortization. The actual net loss under GAAP would be much higher.

The $3.2 billion loss in 2020 also excludes WeWork’s China business whose majority stake it had sold in September 2020.

The occupancy rate at its offices across the globe had plunged to 47% at the end of 2020, down from 72% during the Good Times at the beginning of 2020. And this happened despite WeWork’s walking out on landlords and abandoning office leases around the world, including in San Francisco and New York City.

To survive, WeWork cut its capital expenditures from $2.2 billion in 2019 to just $49 million in 2020, according to the documents, which the Financial Times has reviewed.

With this illustrious performance under its belt, WeWork is trying to raise $1 billion in new funding and engineer a public listing through a merger with a SPAC at a valuation including debt of $9 billion.

That $9 billion is still a huge amount of money for a company that loses huge amounts of money, but a big step down from its $47 billion “valuation” obtained in a round of funding from SoftBank in January 2019.

In the summer of that year, the super-ballyhooed IPO of WeWork collapsed into chaos, followed by massive rounds of layoffs and cost cuts, and SoftBank stepped in with a big package of rescue funding to keep the outfit out of bankruptcy.

A bankruptcy filing is the avenue competitor Knotel has chosen in February this year to deal with its fate. It didn’t have the endless billions to burn through that WeWork got.

And a bankruptcy filing is also what RGN-Group Holdings chose last year. The US subsidiary of IWG (“International Workplace Group,” previously known as Regus), the global coworking giant that predated WeWork by many years, operates the brands Regus, Spaces, HQ, and Signature by Regus.

And now WeWork needs new investors, namely retail investors, whose cash it can burn through. And this time it’s talking with a star-spangled SPAC, namely BowX Acquisition Corp, according to sources familiar with the matter and to the documents, cited by the Financial Times.

BowX raised $420 million in August 2020, and according to SPACInsider has $483 million in trust. A self-respecting SPAC must have a celebrity involved, and this one lists basketball star Shaquille O’Neal as an adviser. The SEC already warned retail investors about these star-spangled SPACs.

The SPAC, with its $483 million in trust, doesn’t have enough money to fund the $1 billion that WeWork is trying to raise, and so both parties are trying to rope in institutional investors to cough up the remainder.

There is no guarantee that a deal will be worked out, the people told the FT, and they said that WeWork has been in discussions with other parties as well.

WeWork’s business is to sign long-term office leases, redecorate the office spaces and make them cool, and then rent them out in smaller portions, or even just by the desk, by the month. In other words, it takes long-term big office leases and converts them into small portions short-term.

This business model is fraught with risk, and so WeWork set up separate legal entities (in the US, LLCs) for each lease; so if it abandons that lease, the damage will be limited to the separate legal entity, which makes abandoning the lease a relative breeze.

In 2020, it has already walked away from a number of these office leases, including in the San Francisco Bay area and in Manhattan, where it is the largest office tenant.

But WeWork isn’t pitching itself to investors with this humdrum high-risk high-loss business model. Instead, it pitches itself as a tech company – as it says in the documents seen by the FT, a “worldwide property technology platform” and an “asset light platform for managing and orchestrating flexible space.”

And it’s sticking to its old ways of handing out propaganda about its future miracle performance, despite its actual and dismal past performance.

In the documents, WeWork projects that its occupancy rate will miraculously double to 90% by the end of 2022, way above where it had been during the Good Times, and revenues would miraculously more than double by 2024 to $7 billion, and that instead of its $3.2 billion loss in 2020 and its $3.5 billion loss in 2019, it will miraculously generate $485 million in adjusted earnings before interest, taxes, depreciation, and amortization in 2021. Miracles galore.

To be honest, the WTF SPAC bubble wouldn’t be complete without a WeWork listing that would let SoftBank get out. Through March 23, 288 SPACs have gone public and raised $94 billion with their IPOs, according to SPACInsider – $10 billion more than the total amount raised in 2020, which itself had been six times as large as the prior record in 2019:

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  117 comments for “WeWork at it Again: Loses $3.2 Billion, Plans to Go Public via SPAC

  1. Brad Tifman says:

    I don’t know what reveals the rigged markets more: Tesla or this turd. But then Tesla is a scam with in a scam that’s spawned more scams.

    Regard less, when they both, and many more, go tits up, it will be the people’s pensions and saving that will “and it’s gone.”

    • rhodium says:

      Tesla is not a scam per se. I expect it’ll take the place of ford or gm eventually. In the meantime the stock valuation is the outrageous scam, but you know musk isn’t complaining. Now there’s talk of increasing the capital gains tax and at least a few people will want to cash out before the law changes. At this point I don’t really care, and I would really prefer that the stock market return to sanity instead of listening to people talk like their stock portfolio butters bread and makes milk and honey shoot out of the spigot. Here’s to hoping dems increase taxes and end this psychotic euphoria for at least ten years.

      • edmondo says:

        Tesla is funded by the federal government – someone should ask Elon why.

        • Asul says:

          Well. I actually think that Tesla is outrageouslly overvalued, but I don’t see it as comparable to WeWork. Tesla improved the EV in such a way, that it proved, that an electic car can be stylish, powerful and can substitute the ICE car. That is a fact, regardless of what we think about the valuation.
          Also it brought havoc to the car companies and now every major car manufacturer needs an EV to compete. Therefore Elon achieved, what he said was the goal: to make the cars electric and remove the ICE cars altogether.
          But let’s see the WeWork company: renting and leasing floor space. What is that? The valuation was once over 47 billion. For what? What was their revolution about? Renting longterm and leasing short term? Or viceversa?

          Everybody hates Zuckerberg, but hey, he was the only one who truly saw potential in Facebook and made it what it is. And the ads on Facebook are revolutionary, when we compare the price of the Facebook ads to the radio, television, jumbo ads.

          So … valuations for some companies are insane, because there is no real tech, or whatever revolutionary concept behind some of these companies.

  2. lenert says:

    (They didn’t call it the Shaq SPAC? An opportunity lost).

    • SpencerG says:

      LOL!

    • MCH says:

      This should be the socially responsible, equity driven SPAC….

      No, not that kind of equity, equity as in dollars lining the pockets of SoftBank and the SPAC.

      I mean, I assume Colin K is not involved.

  3. Seneca's cliff says:

    I am kinda hoping that instead of institutional investors they get the rest of the money from the Mob. Unlike Softbank they know how to wind down a failing business efficiently.

    • char says:

      Uhm, mr. Softbank’s father ran a pachinko hall and he belongs to an ethnic minority in Japan.

  4. Anthony says:

    We’re all doomed……I say…doomed

  5. Ed says:

    Why would any one invest any money in a compnay with this track record, or is there something to gain from those losses?

  6. MonkeyBusiness says:

    WeWork will eventually work out … for someone ;)

    • robert says:

      Maybe they could bring this guy on board:
      @elonmusk
      · Mar 21
      Replying to @cleantechnica
      I am accumulating resources to help make life multiplanetary & extend the light of consciousness to the stars

      @elonmusk
      Technoking of Tesla

      • Javert Chip says:

        I know that’s techno-geek speak, but Elon’s actually got the money, vision, organization….and rocket ships behind him to literally do it.

        Currently, he’s 50 years old; at even money, would anyone bet serious money (say, $100,000) that he wouldn’t do it or die trying?

        Although, now that he has a child, that might make him a little more reasonable.

        • MonkeyBusiness says:

          What? This isn’t his first child. More like his sixth?

        • Javert Chip says:

          Oooops; I stand corrected.

          I’m not really up to date on Musk’s breeding situation.

        • Anthony A. says:

          He has 4 sons from his first wife. After that, IDK.

        • MonkeyBusiness says:

          Well my point is, people don’t change. If they change, then they usually change for the worse.

          I am also unconvinced that he has the money. He almost went bankrupt back in 2008/2009 and I think it can happen again.

          I am an engineer by training and profession, so in general lofty vision and promises mean nothing.

        • Javert Chip says:

          Monkey Business

          I’m sorry to have to inform you, that, while you were out oiling up your engineering slide rule since 2008, Elon Musk has made a crap-pile of money (over $100B and is the richest man in the world).

          Unlike Scrooge McDuck, who kept his wealth as cash in a huge square building that he & his relatives could roll around in, Elon’s wealth comes primarily from Tesla stock (although there are other valuable companies…SpaceX, Boring…).

          I realize this is a personal question, but considering your self-confessed lack of vision and ability to make/keep promises, just what the hell is it anybody pays you & your slide rule for?

        • islandteal says:

          “breeding situation” LOLLOLLOLLOL

        • MonkeyBusiness says:

          JavertChip. We’ll never see eye to eye. You seem to think that “wealth makes right”. That’s your prerogative, and I have mine.

          By your own measure and ruler, we don’t need your opinion because Elon is richer than you, and therefore his opinion is the only one that counts, and yours don’t.

          Also, please do some reading from time to time. Elon already lost his crown sometime ago.

        • Bob Down says:

          Elon is asset rich, but supposedly cash poor. I think it was WSJ that outlined last year how precarious his position is and that his Tesla shares were highly leveraged against cash loans (and part of the reason he divested his houses). In the past he has had to balance it out so he can retain control through not diluting his shareholding.

        • Javert Chip says:

          Monkey Business

          You pulled “wealth makes right” right out of your patooti…I never said or argued such a point.

          Getting mega-rich is a highly unstable 2-legged stool: one leg is the “right” kind of hard work & the second leg is surfing the “zeitgeist”. Even having those 2 components, it’s an unstable proposition.

          Based on your comment (“…I am also unconvinced that he has the money…”), I thought we were engaged on the EXISTENCE of wealth, not your fairy-tale about goodness or badness.

    • doublee says:

      At this point, Elon Musk could lose 99% of his net worth and still be a billionaire.

  7. Jack says:

    Softbank will go bankrupt.

  8. crazytown says:

    WeWork + SPAC. Hilarious. All that WeWork stuff from 2 years ago is ancient history, nobody remembers or cares anymore.

    Maybe the federal reserve should buy WeWork. The next stimulus could just be a letter saying “a subscription to WeWork has been purchased in your name.” Think of how great the occupancy rates would be on paper. Now that would be an efficient way to recycle money between the fed and government.

    • SpencerG says:

      “Cut out the Middleman!”

      • Lisa_Hooker says:

        Middleman? How about Congress having Treasury send money directly to the IRS and cut out the middlemen? Seems more efficient to me.

    • Old school says:

      I watched most of the Congressional hearings with Powell and Yellen yesterday. I heard one congressman ask about a Fed program that it sounded like to me allowed banks to suspend normal valuations of commercial real estate due to covid. This was done to protect smaller banks who finance real estate.

      How in the world can anyone value anything at the moment, especially a Wework Spac?

      • p coyle says:

        i can’t honestly put a “value” on the wework spac, but i can hazard a guess that whatever it gets priced at will be a crappy deal for anyone that ponies up the necessary funds. probably will work out fine for the initial “investors.”

        you know how it goes.

  9. roddy6667 says:

    WeWork sells overpriced pizza by the slice, but people are cooking at home.

  10. SpencerG says:

    So far my only pension will be coming from the U.S. military… but if my pension plan were one of the “institutional investors” to buy into this nonsense I would be… Angry

    • stan6565 says:

      You can be assured that your pension plan will go into this isht. Pension plans are obliged to invest into something, the plans managers don’t care much what the investment is as long as they get their fees, and the plan owners only find out a dead dud in their hands after all the parasites have had their bite.
      I moved all my pension plans into a sipp ( I am in U.K.), and have avoided massive amounts in fees alone in the last 20 years. And my investment is faring well, and is definitely not with weworks and ubers and guggadongs of this world.

      • Javert Chip says:

        Hardly any US Government pension plan (including military & Social Security) have actual assets that are managed to grow & provide pension pay-outs.

        Most (at least dollar-wise) are paid with a magic wand out of current tax receipts.

        • Old school says:

          All dollar denominated pensions in reality are funded by ability of world wide economy to produce goods and services while US is reserve currency. It’s the real economy that matters and that’s why Fed and US Treasury are dishing out dollars to try to keep it functioning in the short term.

        • Javert Chip says:

          Old school

          I basically agree with your statement (“…Fed…dishing out dollars to try to keep it functioning…) in the sense of the Fed “trying”, whether the Fed is effectively “tying” the right thing is a different matter.

    • cas127 says:

      Don’t worry, you’ll still be on the hook.

      When your local teachers’ union pension comes up short (because of invts in things like WeWork and political bribes) your property taxes will be hiked to make up the shortfall.

      • SpencerG says:

        Point taken.

      • p coyle says:

        not disagreeing, but this is the type of behavior that leads to some sort of tax revolt. not sure what that would look like currently, but i bet it will make the boston tea party look a picnic with strawberries and cream.

  11. 2banana says:

    Can we get in some block chain and non-fungible tokens into this thing?

    “worldwide property technology platform”

  12. Phoneix_Ikki says:

    Wolf, you forgot WTF in the title…you have to keep that trend going. There’s just simply too much WTF to go around in this financial world to let it go to waste

  13. Jack says:

    This just show how the world regards the Americans as suckers, they will buy anything as long as you tell em they will make a profit, even the US regulators allow this nonsense for a cut.

    • Javert Chip says:

      Most of the world wouldn’t know what a sucker is even if you introduced them to a couple of Clinton’s previous employees.

      Greed is pretty much worldwide (except in Nigeria, where several bankers and princes are desperately trying to give away millions in lost money).

      Foreigners not only buy American, they’re pretty good at making up their own con jobs.

      • buda atum says:

        “Greed is pretty much worldwide (except in Nigeria, where several bankers and princes are desperately trying to give away millions in lost money).”

        Oi!

        Its not my fault you want your cake on this earth. Some of us want ours in heaven and will take yours, or rather, give your our’s to pay for it especially if you’re buying wework!

        Now, if you’d kindly ask for an address this Nigerian non-prince will email you some newly unfound money.

        • Javert Chip says:

          LOL

          Personally, I wouldn’t touch WeWork with a proctoscope.

          …but then I didn’t believe in Google back in the beginning…

  14. Crush the Peasants! says:

    Liquidity vacuum. Brilliant!

  15. polistra says:

    “Asset light” is the best euphemism of the decade. It openly and directly means “We do not exist”, but says it in a way that investing fools love to hear.

  16. Tom S. says:

    Who the heck wants to work at a company that is losing billions of dollars a year and does office space in a wfh environment? Insane in the membrane. People will buy this SPAC listing though momentum trade is king.

    • Paul from NC says:

      Largely techies that value money above all else. Some of these software ‘engineers’ at WeWork are pulling in 400k/year just in salary.

      • Old school says:

        Investors need to understand that they are the captains of their own ship. There are millions of things to do with your earnings. Giving it to money losing bad business models pimped by wall street isn’t smart imho. Fed’s made a lot of millionaires by providing a put so far.

    • Javert Chip says:

      Tom S.

      Apparently you’ve never heard of Uber, LYFT and too many other “tech” start-up to mention.

      Sounds like you’d be a lot happier working for, say, GM.

      • Tom S. says:

        Pretty much any place that actually makes money and isn’t in office space industry would be fine.

  17. Dave Ryan says:

    SPACs blend in too easily with the timeless dream of con-artists … making lots of money off of other people who have too much money.

  18. Be a shame if the synergy trade blows up. You have acres of empty office buildings to repurpose. Watching dotcoms with no earnings crash wasn’t so bad. Making the assumption that if WeWorks breaks the cost and availability of office space will rise. It all plays into the new inflation outlook. It’s transient until it isn’t.

  19. Jesse says:

    As I understand it, BowX has a redemption value of $10. It’s currently trading below that. Free money in theory, or am I missing something?

    • Wolf Richter says:

      BOWXU dropped over 8% today upon the news but still closed at $10.28.

      • Jesse says:

        Those are the Units. Units are 1 share of stock (BOWX) plus 1/3 of a warrant (BOWXW). BOWX closed at 9.85 according to yahoo.

        I suppose one would have to hold the stock until it came time to vote on the deal to redeem. There are probably better ways to make 1.5% return on your money unless you think the deal will go through fairly quickly.

  20. Rcohn says:

    SPACs are a testimony as to the fecklessness of the SEC.
    I have been watching “billions” on Amazon prime. The difference between the insider trading of AXE trading and SPACs is that the SEC condemns the insider trading of AXE while permitting and encouraging it in the real world of SPACs

    • Old school says:

      You just have to say at this point that the Fed and Treasury are all good on speculative bubbles. They know that they have been successful in cleaning up the messes in the past by Zirp and monetizing the debt. If it blows it will be blamed on free markets and their negative real rate policies had nothing to do with it.

  21. Chris Herbert says:

    Can’t regulators demand at least some rational proof of the outrageously misleading promises these crooks come up with? A ‘truth in advertising’ kind of regulation? It reminds me of the definition of a gold miner: A liar standing next to a hole in the ground.

    • Wolf Richter says:

      Chris Herbert,

      Regulators are much pickier with a traditional IPO. The S-1 filing with the SEC is crucial and you cannot be making those kinds of projections without fear of getting nailed. With a SPAC merger, there are no such restrictions, and companies apparently can project whatever they want to and get away with it. That’s one reason why SPACs are so popular.

      • Jack says:

        Wolf

        I beg to differ on the SEC’s role on these “ atrocities” that they call IPO’s
        and new “ FILINGs”!

        The SEC & the whole soup of government regulators have lost the plot years ago.

        That being said, this is BY FAR the least distressful article that I’ve read on WS :)

        man I couldn’t stopped laughing :)

        Especially when the ( advisor) part was mentioned lol ???

  22. Dan Romig says:

    I enjoy reading the intro: “… shown to prospective investors … for a two-year loss of $6.7 billion, … The actual net loss under GAAP would be much higher.”

    Yeah, that seems like a good place to invest some of my cash, eh?

    • Wolf Richter says:

      Dan Romig,

      ?

      Let me try to have some fun here…

      All heck breaks loose after I lose money on my short.

      My shorts are loose and stained, but if I lose money on my short, I’m going to throw the loose and stained shorts in the trash. And then I can tell everyone that I lost my shorts, I mean shirt, on a short.

  23. YuShan says:

    Broken, obsolete business model.
    Just let suckers swallow it through a SPAC.
    It’s brilliant.

    When will this B#%$$% ever end

  24. RightNYer says:

    “This business model is fraught with risk, and so WeWork set up separate legal entities (in the US, LLCs) for each lease; so if it abandons that lease, the damage will be limited to the separate legal entity, which makes abandoning the lease a relative breeze.”

    As someone who negotiates this type of document all of the time, I’m quite frankly floored that the building owners were willing to accept this structure without a parent guarantee.

    • stan6565 says:

      Parent guarantee underwritten by personal assets :).

      That’s what the lessees like the most. (not:)

    • Javert Chip says:

      Desperate people will sacrifice quite a bit to keep the dance music playing.

    • Russ says:

      The lenders must be pushing the landlord to fill the otherwise non-performing space.

    • Old school says:

      When the story broke about Goldman young bankers working 100 hours a week pushing out SPACs I thought to myself this is a frenzied push to sell what old timers called a pig in a poke. That means a bag that you don’t know what is in it. Things don’t change to much. Sell a bag of poop for hard earned dollars.

      • RightNYer says:

        That’s basically what RMBS and CDOs were. Bad subprime loans packaged together into securities that were rated AAA by the “experts” at the rating agencies.

  25. Anthony A. says:

    They should time this WeWork offering at Easter when rising from the dead is acceptable.

  26. doug says:

    We work may be just behind the curve on pulling this off. 6 months ago, no problem; now, some effort and still in the air. Time will tell.
    I just wish I had predicted this, as it is perfect. Thanks for the $ details so far.

  27. Robert says:

    Much as I dislkike the management, I would think with commercial real estate being given away, Wework should be able to negotiate some favorable deals for its properties.

    Bodes well for the future stock price.

    • Javert Chip says:

      Robert

      You’ve made an interesting point.

      WeWork (or whatever this cluster&%#k is now called) has been hellacious to landlords. But things are so bad now (commercial real-estate speaking) that the world is WeWork’s oyster.

      Workers may not want to go back to a centralized office, but a lot of them apparently appreciate the social aspect (did I mention beer?) of assembling in WeWork spaces.

      Geez: if this takes off, WeWork could actually come out a winner.

      • RightNYer says:

        Here’s the problem. I’ve seen buildings in city areas where the building owners have set up a certain floor for shared space, where a person just rents a desk, a cube, etc. In other words, they’re cutting out the WeWork middle man. Why not? Sure, they bear the risk of an empty floor, but if WeWork is setting up LLCs for each building, they’re bearing that risk indirectly anyway.

        If it does take off, I can easily see more buildings doing this.

      • char says:

        They only spend $49 million on capital expenditures in 2020. For that plan to work it had to be more

      • Stephen C. says:

        Speaking of craft beer at a WeWork office, I am wondering why bars haven’t taken up the new Millennial Model that has been pioneered by this new office-share concept.

        A bar offering members free cocktails, with tiered monthly subscription plans (that covers more than one can possibly drink in any given month, including Uber service for the inebriated.) Premium plans come with a permanently reserved barstool, with your Avatar name plaque on it, and a bespoke app for speed dating, and with 31customized condoms with the brand logo printed right on the condom.

        If you absolutely have to get some work done, there’s a desk just for you in an adjoining, plexiglass-protected space, complete with broadband and charging stations. After (work) parties and/or disruptive brainstorming sessions run ’till 2 a.m. and theme parties with new DJs every Friday night.

        There’s a special walled-off garden in back for exclusive members; proven culture-creators and social media influencers only! This is where the micro-dosing takes place, under supervision of those with at least an MA in Consciousness from The California Institute of Integral Studies. And this is where the 42′-wide depiction of Elon, riding a golden Doge Coin lion, is located. It’s an oil painting on velvet, so members are forgiven if they confuse it for their nan’s Christ-image they’ve seen back in the trailer park in flyover.

        Anyway, I’ve never understood whence came this fetish of splitting work, play, consciousness-raising sex, drugs and music? The Middle Ages? Or is it a Boomer thing?

  28. Fat Chewer. says:

    WeWork disclosed in documents shown to prospective investors that it had lost $3.2 billion in 2020, on top of the $3.5 billion it had lost in 2019, for a two-year loss of $6.7 billion, 

    That is some prospectus. Shut up and take my money!

  29. Arizona Slim says:

    I’m probably the only one commenting who has ever spent any time in a coworking space. Nearly four years, to be exact.

    Any-hoo, if I could climb up on the highest mountaintop, I would urge everyone reading this NOT to invest a single penny in anything having to do with coworking? Why not? Two words:

    1. Turnover
    2. Vacancies

    Let me explain. The first word, turnover, is something that coworking spaces have a lot of. It’s just part of the business.

    The second word, vacancies, relates to what happens if the business does not stay on top of the turnover. The coworking space I was in took its eye off the ball, and uh-oh. Empty desks and offices as far as the eye could see.

    During my final year in this space, I saw the vacancy rate go up, up, and UP. Believe me, it did not help the management sell the place when prospective tenants came in to take a look around. They saw the emptiness and went elsewhere.

    So, people. Save your money. Invest it in anything but coworking!

    • Javert Chip says:

      Airazona Slim

      Not only are you not a wild & crazy kind of fun guy, but you wish to pass this behavior on to others.

      If you wish to live your life ruled predominately by facts and logic, then you deserve what you get.

      (sarc/ in case it’s needed; in today’s world, sometimes it needs to be explicitly stated)

      • Arizona Slim says:

        Chip reduces Slim to an uncontrollable fit of laughter. Complete with unmasked coughing.

        Oh, well. I’m in my WFH office and no one else is here.

    • char says:

      They claim they will have an occupancy rate will be 90% by the end of 2022. But is that not way to high for such a business model. It is like a business airline claiming it will sell 100% of its first class seats. Possible but you are not targeting businessmen then

      • Arizona Slim says:

        I’m here to tell you that 90% occupancy is very difficult to achieve in a coworking space. And, if this lofty milestone is achieved, it doesn’t last very long.

        ISTR reading a post by Wolf, in which he said that it’s quite expensive to keep filling vacated desks and offices in a coworking space. And that vacancy problem just doesn’t go away.

        I’m reminded of the time, a few weeks before my former coworking space closed, when one of the biggest offices in the place was for rent. It had been for rent for quite a few months, but no takers.

        One fine morning, the space’s Official Videographer came in to do a shoot. I saw him walking, crawling, and darn near levitating around that empty office, trying to get the best angle on what was essentially a glass box of air.

        I might add that I had to pay rent for my little desk, but this guy got his office space for free. Y’know, because he was the Official Videographer.

        Did the video shoot succeed? Nope. That office stayed empty until the space closed.

  30. fred flintstone says:

    I lived in an era when government spoke of millions, billions and now trillions…….thought I never see quadrillion……I was wrong.

  31. Seneca's cliff says:

    We were once a great country of practical men and women. Our great companies changed the world mass producing automobiles, creating commercial air travel and inventing the entire computer industry from transistors to modern CPU’s. Now one of the flagship companies of our current era loses Billions re-renting office space to people who make a living editing cat videos and curating Tik Tok posts. Not sure if this bodes well for us or not.

    • p coyle says:

      great summation. hopefully this will make it into a history text for gradeschoolers in the future, assuming we put things back together enough to have gradeschools…

  32. Ron says:

    Simple solution start fitting fund managers that put our money at risk on this bs no mote common sense stand up pull your money out watch how fast idiots straighten up

  33. Ron says:

    FIRING

  34. Ron says:

    I have a shitty company losing tons of money but need to sell it in a spac invest haha get rich who is greater fool when I take your money and run

  35. Aussie andy says:

    Mayoshi son had $100 billion in his overall fund to play with. Look at the outcomes Greensill,Wework, the pizza business.I’m so jealous, wish I had just $1 million to play with.

    • Javert Chip says:

      Aussi Andy

      This is basically a marketing problem:

      Assuming you don’t have millions, just pretend you did, and now you at least have more money than the “making pizza in a moving truck” business.

      Come up with some creative story of how you lost it all, and you have good bar stories…

      People love good bar stories.

      Hell. I met some guy in a bar a little while back who was an ex astronaut and US Navy SEAL. He was only 32 and hadn’t finished college yet. Great bar story.

    • Mike says:

      History repeats itself. Mayoshi son did the same thing during the dotcom bubble. Look it up. It’s surprisingly the same to what’s happing today.

  36. Beardawg says:

    Some of these Zombie pitches are priceless (pun intended). As others have asked…who REALLY does invest in these SPACS for Zombies (SPAZ) ?

    • Javert Chip says:

      Beardawg

      Q: who REALLY does invest in these SPACS for Zombies (SPAZ) ?
      A: People managing your pension money (it’s called “other peoples money” for a reason)

      Next question?

      • Beardawg says:

        J-Chip

        I appreciate the hilarity. I have self-directed IRAs (real estate mostly but some equities too). In truth, do Sector ETFs hold stuff like WeWork & SoftBank? I should probably know the answer already, but I don’t.

        • John Galt says:

          Javert Chip,

          The “Making pizza in a moving truck” business tried to hire me in 2018! Snapped up a couple hundred mechanical engineers and technicians and within months let them all go! I wish I could recite the recruiters sales pitch, but he was laying it on thick. I wasn’t buying, and it was a definite “aha” moment in my bubble mindset. Wild times we live in. The SF Bay area is at the epicenter it feels like.

        • Old school says:

          May I ask who you use for your trustee for your self directed IRA? I always heard that it was cumbersome to run real estate through a self directed IRA. Do you find this a problem?

        • Javert Chip says:

          Beardawg

          WeWork isn’t public (yet) and presumably Softbank owns enough of it to rolled up into their balance sheet. Sooo…if you happen to have some Softbank, you also have some WeWork.

          Softbank is a Japanese company; it’ll depend on the fund you’ve invested in. Your fund’s prospectus (yea, that thing printed on tissue paper in ity-bity 3-point type) will list the instruments in which your fund has invested. Generally also available on the web.

  37. DR DOOM says:

    This was good timing. Stimulus plus cash out re-fi ought to get this loser back above ground. This is the Zombie offspring of a Zombie. A head shot might not put this brain eater down. Gonna get the popcorn ready for this episode.

  38. MCH says:

    If you don’t succeed at first, try and try again…. life is full of delicious little tidbits like this.

    It’s a great real estate play. Say, do you think they will pay dividends? ?

  39. Artem says:

    Warren B runs a SPAC in Omaha, and no one seems to mind.

    • Old school says:

      That’s not true. He probably has the most readable annual report of any company in the US. You have to read Ben Graham’s book “Intelligent Investing” to understand his philosophy. It’s probably the safest single stock investment you can make. I made an investing mistake to ever sell it.

      • Artem says:

        Old School, Intelligent Invesor is an instructive and simple treatise on doing your homework. I have indeed read it! Warren pioneered a special acquisitions company with BRKA and the size of Berkshire doesn’t allow buying small companies as some SPACs could. I do not own any SPACs as the majority of SPACs are total garbage, but I’m sure some are better investments than Berkshire.

        Also, I would disagree that Berkshire is transparent. While the shareholder letters are excellent, decisions to buy and sell assets are random. Their AAPL purchase was entirely arbitrary, almost as if Warrent wanted to buy SPY shares. As your favorite book put it, beware of asset managers that express interest in buying indices.

    • Javert Chip says:

      Artem

      Some people just throw names around without knowing what they mean. Maybe Berkshire is really a Montessori School!

      Actually, it’s a conglomerate, not an SPAC . I might be wrong, but I don’t think Buffett has ever taken a reasonable sized business public by buying it (maybe it’s happened with a couple tiny businesses like the furniture company in Omaha).

      • Artem says:

        Javert Chip,
        Berkshire acquires and repackages businesses into a publicly-traded vehicle. The funds were raised from the public to do this. That’s exactly what SPACs do.

  40. Lawefa says:

    When in doubt and all else fails as a business, go public.

  41. cas127 says:

    It is/was an indicator of how weak CRE mkt really is/was.

    WeWork was able to run its media hyped con because it could lease up a sh*t ton of otherwise vacant space in a mkt with otherwise weak demand.

    Job growth has been so slow for 20 yrs (and cost control so tight) that building owners have had a hard time filling millions of sf with tenants willing to pay the sky high rates that justify the bldg owners’ over inflated bldg valuations.

    In walks the WeWork hype machine with its shoe shine and b*llsh*t and a willingness to “pay” sf rates that may not be all they appear to be once the actual leases are read…but close enough to bs lenders/prospective buyers.

    And the bldg owners have no better prospects anyway.

    So semi desperate con man A (bldg owner) “marries” up with ebullient con man B (WeWork) to half run a business and to half con their respective mkt suckers.

  42. CreditGB says:

    Common sense and critical thinking is long gone. They will sell this dumpster fire to the useful idiots of the retail investor world who suffer from terminal cases of FOMO. And Softbank with other insiders will get out with much lower write offs than they are currently facing.

    And the beat goes on…..

  43. CreditGB says:

    OMG, I thought the Shaq comment was an attempt at humor…

    What is next, Masayoshi Son coming to the show “Master Class” with all the other empty headed imbeciles claiming know how to run your financial life?

  44. Yort says:

    USPS should go public, after stating today they have lost $87 billion in the last 14 years…worth at least a Trillion dollar valuation, right?

    As I look at the “Defiance ETF” SPAK add playing on this page as I type, why do people want to invest in “losing” companies, but yet they seem to not want to invest in “losing” sports teams? Perhaps in the future sports be played to see who can lose the most? Bizarre…

    • Javert Chip says:

      Yort

      People “invest” in SPACs because they are specifically designed to price the SPAC-afication of a private company so that PREVIOUS SPAC investors get a nice bounce. Founding investors (the guys setting up the SPAC), as you might imagine, essentially make a killing.

      Once the previously private company has been SPAC-afied, who knows what happens to follow-on investors.

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