How Can an 11-Year Old Company Lose $844 Million on $661 Million in Revenues? WeWork Shows How, Having Lost $13.3 Billion on $10.6 Billion in Revenues in Less Than 4 Years

It just doesn’t let up with this outfit.

By Wolf Richter for WOLF STREET.

Now that WeWork is publicly traded after its merger in October with the SPAC, BowX Acquisition Corp., the earnings emerge, and they’re as grisly as before.

At this rate of cash burn, it’s going to run out of cash soon unless it gets a whole lot more cash by selling a whole lot more shares to investors eager to watch the amusing spectacle of their cash getting burned, or watching the even more amusing spectacle of other people’s cash getting burned.

WeWork, in its first earnings report as publicly traded company, said today that revenues fell 18% year-over-year to $661 million, from the already beaten down levels of Q3 last year. Which generated a net loss of $844 million.

How can a mature 11-year-old company lose $844 million on $661 million in revenues?  Don’t they have any adults over there?

WeWork would just be better off shutting down and giving away free money. Its investors don’t seem to mind. After 11 years of burning umpteen billion dollars in cash, it still doesn’t have any idea how to get to a functional business model that doesn’t just burn cash.

For the first three quarters of 2021, the company had a net loss of $3.8 billion on $1.85 billion in revenues. Let that sink in for a moment.

Over the nearly four years since 2018, per its S-1 filing, the company had $10.5 billion in revenues and $13.6 billion in losses. This idea that there is a business model somewhere hidden in there when net losses consistently exceed revenues after 11 years in business is just stunning:



Net Loss

Billion $










Q1-Q3 2021






WeWork is buying its revenues.

Expenses also fell year-over-year, but there were still a huge gigantic bunch of them.

Note that in the table below, even the “Location operating expenses” in Q3 ($752 million), first line item, already outran revenues ($661 million). These expenses do not include depreciation and amortization, or selling, general and administrative expenses, or interest expenses, or any of the other expenses. They’re essentially the expenses needed to run its office locations on a day-to-day basis, and they exceed the revenues from those locations. In other words, the company is buying its revenues.

To get $661 million in revenues in Q3, WeWork spent $1.5 billion in expenses, which is truly a sight to behold:

WeWork 2021 Expenses

2021 Q3

2021 YTD

Million $

Location operating expenses



Pre-opening location expenses



Selling, general and administrative expenses



Restructuring and other related costs



Impairment of goodwill, intangibles & other assets



Depreciation and amortization



Net interest expense



Foreign currency loss






Total pre-tax expenses



WeWork said that at the end of Q3, it had an occupancy rate of 56% — meaning that 44% of its office spaces were vacant. 44%!

Upon the news, shares of WeWork [WE] rose 3.4% today to $9.51, as enough stock jockeys thought it would be fun to watch this cash burn, but shares remained below the SPAC price of $10 a share, and were down about 36% from the SPAC’s shares in April when the merger with WeWork was announced, and down about 30% from the October spike when the merger took place.

WeWork now has a market capitalization (shares outstanding times share price) of $6.4 billion, which is still inexplicably immense, given that the company has no functional business model, has spent 11 years burning huge amounts of cash, and continues to burn huge amounts of cash, and has operating expenses that outrun its revenues even today, after 11 years of being in business.

But this market cap is way down from WeWork’s peak “valuation,” obtained behind closed doors via SoftBank’s well-oiled startup investments shenanigans, of $47-billion in 2019 before it all blew up.

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  153 comments for “How Can an 11-Year Old Company Lose $844 Million on $661 Million in Revenues? WeWork Shows How, Having Lost $13.3 Billion on $10.6 Billion in Revenues in Less Than 4 Years

  1. MonkeyBusiness says:

    Probably going to be a Reddit favorite!!!!

    • Bathelix says:

      What I can’t believe is how these things are still accepted. He was shown to be a cult like conman with no real business model and still bought out in some $1B deal after the whole thing failed. Ridiculous.

      • NBay says:

        Is this another PE cleanout operation because they actually own some land, sorta like Sears, but with the SPAC twist?

        The stock jockeys can be ignored because they will play with anything that is listed and changes “value”.

    • Djreef says:


      • buda atum says:


      • Joe Saba says:


        • NBay says:

          I would love to have “Woke” defined for me, I know it’s just another insult, but does it have any special new nuances I should know about, other than just being the latest in a stream of insults generally applied to educated “liberals”? Maybe contrast it with who isn’t “woke”?

          Figure you are the man here for the job, or maybe Nacho whatever he is now.

        • Woke probably means believing that people are defined by their circumstances, e.g., colonized, marginalized, ghettoed, minoritied, disadvantaged, rather than by what the person has achieved and taken responsibility for. The opposite of woke is basically expecting accountability and integrity.

      • RH says:

        LOL. Read or watch about China’s oncoming real estate Ragnarok for a nice dose of relaxing schadenfreude! It is better than yoga or exercise for me.

        Makes me relax and sleep like a baby watching Patrick Boyle or others slowly explain the disaster. I sometimes put them on a loop as I fall asleep. LOL

        Just contemplating the problems that they face given the size of the real estate disasters throughout China is like watching hundreds of huge dominoes fall little by little until they will all land and crush your least favorite persons: the CCP! Great schadenfreude!

        • intosh says:

          There’s a reason why the Chinese government is letting the real estate businesses fail: the investors (many foreign) *could* lose their shirt, but not the home buyers. The government is forcing those businesses to deliver to and compensate the home buyers first. Facing the threat of their investment being completely wiped out, reckless institutional investors fat with funds will pour money in to save these businesses. This is very different to how 2008 was handled in the US.

          So you’ll probably be disappointed expecting armageddon in China.

    • Nick Kelly says:

      And WR said he doesn’t give investment advice! If this isn’t a short, nothing is. Oops, forgot, nothing is a short now.

      • Nacho Bigly Libre says:

        Investment advices on this site haven’t fared well.

        Wolf highlights the absurdity of the situation. Not his fault that the market, the Fed and the government are even more absurd.

    • gametv says:

      I assume the business model moving forward is to increase the occupancy rate dramatically and that would solve the problem with losses. I dont know if this is realistic within the current environment, but I think the reason the stock rose is that the markets believe that this can happen.

      I think the valuation of Rivian is alot more ridiculous. I tried to short one share of Rivian today, just to see if I could borrow the stock, but it failed. There are no shares available to short.

    • Morty Mc Mort says:

      All the Market Suckers miss the point..
      Those at the Top of the Giant Capital Pyramid have made so much in so many other ways.. Fees… Buybacks..
      sooner or later.. most of the losses are made whole by Government, or Retail investors.. or Tax/Loss schemes…

  2. Brent says:

    There is a brand new 400 page book on Amazon:

    “The Cult of We: WeWork, Adam Neumann, and the Great Startup Delusion”

    When the price of used copy dips below $5 I’ll buy…

    And put it right next to “Den of Thieves”-the ultimate word on 80’s financial frauds cons and shenanigans…

    Milken,Boesky,Siegel,Kimba Wood,KKR,S&L,…

    Probably does not ring the bell nowadays.

    • Sit23 says:

      Also Barbarians at The Gate, starring the same usual suspects. The same merchant bankers driving merger deals totally to benefit their merchant bank fees, after deducting the commissions and bonuses to the top executives of target companies upon successfully completing their deals. A great read. Still some copies available at all good Sally Army shops.

    • Old School says:

      I assume there will come a time when only businesses that have a healthy balance sheet and have a positive cash flow will survive. Don’t want to be in trash when that day comes.

    • MarkinSF says:

      Den of Thieves. I still have my copy.

    • Milken’s fund owns 125 SPACs. He was pardoned by Trump.

  3. Panamabob says:

    This makes about as much sense as all the other nutso stuff going on in America at this point in my life at 72 years.
    As I’m fond of saying “I’m glad I’m old” since I won’t have many decades left to witness this destruction and craziness.
    God help my kids and grandkids who will have to survive this mess.

    • General Strike says:

      The solution is Socialist revolution.

      • BuySome says:

        We’ve already had that. Did you forget that the land and its’ resources were largely in a public pool to be put to private development for a common good? Our main problem has been deciding how to use the powers that were vested in a rough but good document that was agreed upon by a mix of representatives, although not the general public. What we need is a better view of what land is good for, because you always have to come back down to earth. A socialist doctrine alone will never be enough to solve the problems.

      • Petunia says:

        A socialist revolution would require universal healthcare, and we all know that’s never going to happen in America.

        Universal healthcare is the reason MMT won’t happen as well. In order to have MMT, it needs to be a livable income, which means it needs price controlled healthcare costs.

    • ChrisR says:

      If you have any sense of duty to help your kids and grandkids to survive, please don’t vote GOP or Dem in any future election. But do vote for someone else. If you don’t know who, start with a independent. The craziness starts in Washington. And it is craziness. We owe it to our future generations to clean up our own political mess. Not expect them to do it for us.

      • Dan Romig says:

        I second that motion. All in favor say ‘Aye.’

        • VintageVNvet says:

          ”CLEAN HOUSE, SENATE TOO” was a common bumper sticker back in the days of the last inflation gone wild Dan.
          IOW, what really needs to be done is to vote out EVERY incumbent until we have folks at every level of GUV MINT who actually represent the interests and needs of WE the PEONS instead of the oligarchy.
          Simple to say,,, not so easy to accomplish within what is clearly a political system designed and now operated to provide ”LEGAL BRIBERY” to any and every politician once they maintain office for a second election.
          Having seen enough, I am totally against violence at every level, and continue to hope WE Peons can accomplish this without any more of it…

      • Augustus Frost says:

        The problem isn’t just the candidates, it’s the policies and the voters. It’s the culture which is rotting from long term social decay.

        • economicminor says:

          It’s also a combination of Social and Main Stream Media. They have no social conscience. They are only in business for the money. Capitalism is great but it sure has its flaws.

        • robert says:

          Look up video interviews of Yuri Bezmenov, KGB defector in the late ’60s who describes the whole process of cognitive dissonance. It takes a few generations to take effect, starts in schools, and is irreversible without dramatic intervention because the early generations end up running everything, which is then described as normalization.
          If everything seems upside down, it is, at least to any remaining ‘normal’ (i.e. mostly very old) people.

      • Nick Kelly says:

        Crazy talk. You might as well just advise them to abstain, then you can complain about the result anyway.

        1. Politics is the art of the possible. It is not possible to change things by not voting for anyone likely to form government.

        2. The perfect is the enemy of the good.

        3. Life is a continuum. Only in digital logic is there a zero and a one, on or off, black or white. Reality exists in degrees of good or bad.

        The people commenting here aren’t actually starving.
        The big deficit in the US after the last 4 years is not a lack of food or the essentials of life it is a lack of decency.

        If anyone has any doubt where this originated…

        • Crunchy says:

          It seems you are suggesting voting the less evil candidates into power. I can’t abide by that because my conscience no longer allows me to vote for any candidate that does not predominately represent my interests.
          If no one votes against the big ticket candidates, change will never happen. This is, in fact, our current situation. I have but one vote and it is precious to me regardless of whether it is the deciding vote or not. My vote may be a nearly insignificant squeak from the fringes, but it is nevertheless a message.

    • kam says:

      How can these “businesses” have the surreal cashburn(s)?
      The Federal Reserve.
      No private investment in these phantom businesses would occur without the Fed.
      In funding the Monopolies via Mergers and Acquisitions, in funding start-ups, the Fed has destroyed price discovery, and destroyed the competitors of the less-well-connected.
      Rather than a nation’s Central Bank assisting the Real Economy, the Fed has now become the Economy.

  4. Ted says:

    Softbank just wrote off $50 Billion in China per WSJ. Who’s the bigger idiot, WEwork or Softbank or the shareholdersof WE?

    • Thomas Roberts says:

      It’s basically a game of hot potato, as long as you aren’t the one holding it when it explodes, you come out ahead. Everyone who owned Wework stock and sold it before the boom is a winner. You are also okay, if it was about to be tossed to you, but it popped first.

      Stock Market 101

      • BuySome says:

        Other people’s money is good to get, as long as you aren’t the one holding it when the dye pack explodes.🙀

        Bank Robbery 101🤐

  5. Frostbitefalls says:

    Every time I read one of your head scratching articles and I think that is the top of insanity, you come out with a story like this. I have no other words.

    • JGarbo says:

      Perhaps you mean “scathing”…

    • Thomas Roberts says:


      You haven’t seen nothing yet, the final craziness, before the everything bubble pops, will probably make you question reality itself. Some people might think they have already questioned reality before, but not to the upcoming magnitude.

      Remember tulip mania was a thing.

      • Sams says:

        People also better read all of the tulip mania story and back story. Very much the same as today, excess money chasing yield.

      • Augustus Frost says:

        Today’s is much worse than the Tulip mania, not even close.

        That event was localized to a small country and lasted a few years. This is global and has lasted a few decades, at least since early 2000.

        • Nick Kelly says:

          The Dutch govt had to pass a law negating tulip bulb debt.

        • Thomas Roberts says:

          Augustus Frost,

          The reason tulip mania is such an important story, is just the sheer absurdity of it. It’s a story of how LITERALLY ANYTHING can randomly go up in price and an entire nation (its size isn’t relevant) can suddenly be drawn into an insane asset bubble of it. That country, thinks this is the future, now and forever. Some do realize it will pop eventually, but most don’t.

          There are countless parallels to today, in that story, for the many asset bubbles across the world. Despite tulip mania being obviously unsustainable, the masses believed in it, just like the stock market of today and the 1920s. Back then there were people openly talking about it’s unsustainability, just like we talk about it now.

          Eventually, the masses will come to realize after much pain and suffering, that Pokémon cards are the only real safe haven asset.

        • Nick Kelly says:

          At least with tulips you got something. With BC you ‘get’ a number. One thing we know about BC: it’s not a currency, Imagine if the US dollar fluctuated up and down several percent per day. All contracts and even store prices would have to be in Swiss francs or even euros.
          So now the BC bugs are falling back on ‘store of value’.

          If you got in early great. If you got in at sixty nine thousand, not so great.
          So let’s stop calling them crypto or digital currency. Digital gold? Or digital chain letter?

        • NBay says:

          Ace analogy.
          I remember seeing several actual chain letters back in the 50’s, early 60’s.
          Some were downright onry……said a curse of some kind would be upon you if you broke the chain.
          But many went for them, WTH, was only a buck.
          The lotto ticket of those days.

    • Xaver says:

      There’s no limit to insanity. You have to wait until most are under water if you want a bit of reason.

      • BuySome says:

        Captain Smith’s attitude in a nutshell! Don’t unlock those gates from third class or they’ll swamp the lifeboats. And drowning people might pull you down with them. Just bring on the music and pretend it’s a drill. We need more ice for the drinks. And don’t let the water cooler go low. Now put your backs into it, and row! Sparks and his electro-machine will get help…just in time.

    • robert says:

      Well, that’s ambiguous.
      But, anyway, WeWork does have a business plan: a business whereupon everyone travels to congregate in short term rental workstations in a current work-from-home market.

      • Harry Houndstooth says:

        Great comment: succinct, true and hilarious.

        ” WeWork does have a business plan: a business whereupon everyone travels to congregate in short term rental workstations in a current work-from-home market.”

        Like the sock puppet in the 1999 Macy’s Thanksgiving Day Parade, we should we looking for a WeWork balloon this year.

        • BuySome says:

          Hey, there’s a possible start-up…”We-looking, a job service for those who really don’t want to go to be labor as long as there’s a $upport network.”

  6. Escierto says:

    It makes perfect sense in bizarro world. The more money you lose the higher your stock price. Just look at the gold mining stocks – they are making money hand over fist and their stocks are being driven into the ground. The nerve of them – making money!! What do they think this is? Capitalism?

    • CRV says:

      No fees to be earned there. So not interesting to banks.
      I’m heavily invested in miners of all sorts and am doing reasonably well. I’m in it because i think common sense will prevail in the end. It has to. Otherwise … there will not be enough ink to draw WTF graphs.

      • BuySome says:

        Mining and refinement are just two more parts of our dirty industrial processes. If there were any real common sense on this planet, we’d see some serious environment related clamdowns on both extraction and useage of the things that make advanced survival possible. And thence, real pricing of strategic metals. No doubt, silver at $150 per ounce would be a new base. What gold should be at is much more complicated..even now it runs into those psychological barricades which have held it below 2k while the river of electro-money flows over the falls.

        • Augustus Frost says:

          There is no way silver should be worth anywhere near $150/oz. Look at what other things cost.

          At $150, it would take somewhat over 2000 ounces to buy the median priced house. Somewhat over 200 OZ to buy the median priced new car.

          The only time silver was worth near (actually above) that was in 1980 when it was in a massive bubble. The result is a currently 52% nominal loss 41 years later.

          Gold is also relatively overpriced, right now.

          If it’s cheap relative to fiat currency, doesn’t matter. The purpose of money isn’t to acquire other forms of money but the goods and services people need and want.

          Later, I believe both will be worth more but much later, at minimum I expect gold to lose a lot of relative value versus the goods and services people need (as opposed to want) to buy.

        • Sams says:

          Response to Augustus Frost.
          A silver dollar, or more specific a Morgan dollar minted from 1878 to 1904 do have close to one once of silver and did at the peak in 1898 have a value of US$ 126. The inflation calculations can be questioned, but why should US$ 150 be way too much?

          Back then silver was used for jewellery and money, today silver is an important raw material in many industry processes and products.

        • BuySome says:

          A.F…..the world changed. Silver is more fundamental to future technology. (A rising price might force the development of replacement or conservation, but that won’t happen in the near future, or until the push comes.) No silver…no electrical connections to build all that stuff and run it. How much does a higher price of silver add to final costs? When have we ever dealt with the real long-term permanent costs of effluents and destruction. We can always grow trees for housing. But silver is lost rapidly in useage and replacement will get much more expensive in many ways. It once was the primary form of money near equal to gold, but that role has long diminished while a new value is rising. What’s lagging is our ability to see what it really is in terms of need. Gold is a very different story at this point.

        • Billybob says:

          1oz of gold = nice suit

          So is gold overpriced in USD?

    • ivanislav says:

      Miners in recent years haven’t invested much in finding new supply. So they’re eating into what they have discovered and that should make its way into the stock price to the degree that the market is rational.

  7. gwb says:

    I suggest a new name – WeGoofOff.

  8. nnn says:

    The Wall Street cabal running the show

  9. Phoenix_Ikki says:

    This bizarro world suck and doesn’t look like it will end anytime soon. Tesla worth a cool trillion and now Rivian worth a cool $110B with 150+ delivered after 10 years in business…yup because of promise of explosive future growth.

    You would think after WeWork people will learn…guess lemmings rules the world…

  10. SpencerG says:

    Thanks… but if it is all the same with you I think I will NOT invest in these guys and enjoy “watching the even more amusing spectacle of other people’s cash getting burned.”

  11. Mak says:

    Meanwhile my investments in companies that actually turn a profit seem to be treading water….

    I did manage to pick up some loose bitcoin change off my desktop from 2015. A 34000% profit…. Go figure. It is a nuts world.

    Pity for me it was just loose change from a payment with me being curious about bitcoin from a technical point of view rather than an ‘investment’.

  12. Old School says:

    This is what you get when Fed policy is blowing asset bubbles and Fed has real hurdle rate at -6%. It is a policy that makes a manic depressive cowboy like Elon Musk who has on net destroyed capital the richest guy in the world.

    • historicus says:

      Right you are.
      Central Bankers have denied “corrections” and “cycles”….free market natural functions that flush excesses and the poorly financed.

      The fake low rates have created a yield chasing, misallocation of resources world.

      But, I guess Central Bankers believe everybody should get a trophy and every one in the class be invited to (fill in the name)’s birthday party.
      Central Bankers know better than the real free market…just ask them.

  13. phleep says:

    This prolonged departure from fundamentals is so weird. I recall in the dotcom years, Silicon Valley started off with promising (if speculative) companies and ideas, and drifted over time into pure marketing. Sensing free money on the table, free lunch, a zero sum transfer, the rats moved in (as they did into the hippie movement, which has interesting Bay area cultural parallels). No need to provide value, just have a charming superficial story, build a facade, and the “investors” will come. I am not sure of the relative numbers (I don’t have Wolf’s skills) but things now seem far down that path. Cults of personality abound in today’s society, not unlike the grotesque scenes in the post-hippie Bay area.

    Back to stocks and dotcoms, as one part of the tech market collapsed, the whole roster fell. This time around I think the fools, more isolated financially in their fantasies and stashes of “free money,” might be wiped out in larger numbers without taking down the whole (NASDAQ) list and other stocks too? I’m not sure how cross-invested these things are.

    I keep waiting for the other shoe to fall, and down will come NFTs, these fundamentally flawed tech ventures, etc.

    • historicus says:

      As the saying goes, “when they raid the brothel, they arrest the piano player too.”

      • phleep says:

        But these days, if the piano player is connected, they subsidize and then bail him out too. I think Max Weber parsed that out: Capitalism and the Protestant ethic, as he saw it, a creed of future value creation and accumulation, compared to societies built on being connected.

        • historicus says:

          Save Goldman Sachs (where I was CEO) and let Lehman drop?
          H Paulson

        • NBay says:

          Proton SPIN being CONNECTED is the physics basis for an MRI machine. NO AGENDA. Go look it up. Sheesh.

    • COWG says:

      Apparently the only fundamentals needed are to market yourself as a disrupter, lose a few vowels in your name, throw in a “Z” for good measures, try to grow a raggedly a$$ beard and wear formal t-shirts for tv….

      • TimTim says:

        Their conformity of presentation being at odds with implied uniqueness or ‘disruption’.

      • Quadra says:

        Rivian Automotive RIVN is missing the Z but it still works.
        just niche it as disruptive
        Market cap of 130 Bio. Larger than VW.
        Why bother producing any Cars just sell the shares and walk away.

      • Brent says:

        “ZZZZ Carpet Cleaning”

        Created in 1982 by 16 y.o. Barry Minkow.
        >>100 P/E,zero revenues (and money laundering for the Mob out of sheer desperation), Barry driving Ferrari,raving articles in WSJ,NYT and Forbes…

        Barry is in & out of prison ever since.
        After first prison term he became a Born Again Christian and a Minister.

        Defrauded his church of $2M and was incarcerated again.

        Last time I checked he was Fraud Investigator.

    • Augustus Frost says:

      The mania is worse now than in 1999/2000. Look at the scale of these companies now versus then.

      There were no companies “worth” over $100B with the “fundamentals” of these bags of hot air back then.

    • kam says:

      The extremely Profitable Internet companies are all monopolies/oligopolies whose main revenue is advertising.
      Amazon is the electronic Sears Catalogue.
      And every single one of them exists by wiping out competition, all while American politicians cashed a pittance personally for selling out the American public.

  14. CCCB says:

    Can anyone recall what made the tulip mania bubble burst?

    • IanCad says:

      Tulips became an early crypto-currency. When the more prudent recognized the folly they dumped.
      History does repeat itself. Churchill cited its study as definitive evidence of the utter unteachability of mankind.

      • historicus says:

        keep the black ones…most valuable
        read the Book on this and Pacific Bubble and others

        Extraordinary Popular Delusions and the Madness of Crowds

        • IanCad says:

          I have the book and my post was written in the light of my having read it.

        • Augustus Frost says:

          There isn’t anything in that book which is even close to the collective insanity present today.

        • Tom S. says:

          All I can say is my Chevy Impala is worth more as a trade-in than what I bought it for over 65,000 miles and 4 years later. So we’ve got to be at the top of this Matterhorn.

        • Nick Kelly says:

          An English sailor ate one thinking it was an onion and got 2 years in jail. The Govt finally passed a law negating debt re: bulbs.

          A Jubilee! Coming from the Dutch!!!

    • Old School says:

      I read up a little on it. It had two main elements.

      Technology and a futures market. The technology was progress in cultivation of vegetables and flowers in Europe. The tulip was a new technology flower that made it’s way to the Netherlands and it took about 30 years for the bubble to form.

      Formal futures market was introduced at that time. The Netherlands was already a leader in financial markets. Futures contracts were written on delivery of the bulbs and like today the financial contracts created a speculative bubble and when prices of tulips rolled over the contracts started being broken.

      Seems like peak was about 10 times annual wages of a skilled worker for a single tulip.

      • BuySome says:

        The problem today is a two-lip mania…the upper one and the lower one both pushing the demand for decaying flowers that stink. If those lips were working the way they should, we’d have regulations to stop the rot peddling by Wall Street florists fronting for corporate debt farmers.

    • Wolf Richter says:

      Tulips wilted 🤣

    • robert says:

      “Can anyone recall what made the tulip mania bubble burst?”

      No bid. The usual reason.

  15. phleep says:

    Maybe there is a demographic thing: a similar number of (aggressive and gullible and aggressively gullible) young people as in baby boom days. There was lots of zany (sometimes sinister) craziness in the boomers’ coming of age. (Let’s not talk about the 1920s.) It wasn’t just a bunch of Adam Smith types building for their future, at the time. The folks closer to that mold were the Mike Milkens, toiling away at bond statistics, ignoring the hippies raving and protesting, drugging and screwing around outside at Berkeley. But when I was a kid, I did not have free play money from he government to toss around, or (thank God) COVID and all its constraints.

  16. Crush the Peasants! says:

    If only WFH were possible.

  17. Relearning Economics says:

    Higher constant expenses could be due to long term leases that the company cannot get out of. This could be 5-10 years or more. i.e. leasing buildings. I think there were reports for letting go of some buildings or re-negotiating rents based on current lower usage. Wework is has been the biggest player in some cities like London.

    Lower Revenue this year 2021 compared to 2020 could be due to WeWork customers who were locked into short term contracts and couldn’t get out.
    Once short term contract completed the companies have not renewed.

    Keeping the above in mind, having long term fixed costs and extremely variable regular income. That is more akin or has characteristics of a manufacturing company rather than software company. Where the valuations have been derived from.

    • Wolf Richter says:

      WeWork already defaulted on a whole bunch of leases (held by separate LLCs) and let the office spaces go back to landlords. They started doing that some time ago, before the pandemic even, to cut costs.

  18. TimTim says:

    Casino fun tokens for shares.

    Must be a game in there I’m not seeing..

  19. Perpetual Perp says:

    The proliferation of BS jobs replacing productive ones is the underlying cause of all this weirdness. Congress should have a full employment policy that puts people to work in areas where the private sector simply cannot afford to go. Biden’s $1.2 trillion infrastructure effort will help.

    • BuySome says:

      Filling in the potholes in the postal roads and unclogging the canals isn’t what built a transcontinental railroad system. I hope Joe is thinking further down the road like Abe did. Or we would still be living in log cabins peeing outside the door.

      • COWG says:

        “ Or we would still be living in log cabins peeing outside the door.”

        Or living in tents, peeing in the street…

        Okay, wait… never mind…

        • BuySome says:

          Exactly why Joe needs to make a jump. A once healthier system badly worn out where costly repairs do not bring real results. Building a new system can employ more that need it now, rather than waiting for a trickle of rain amidst a flood of mud. A dirt diet is helping these people.

        • BuySome says:

          That was “not helping”.

        • COWG says:

          “ That was “not helping”.

          Buy some,

          No, I get what you’re saying…

          But saying it is one thing… however the actions of the individuals you want to help, if you pay attention to these people, is another…

          There are jobs, help, and opportunities aplenty for many of the lower among us… and have been for many, many years… the only reason these people live the way they do, is because they want to…

          No amount of money will change that…

          You transpose your standard of life to think that these people, if given enough money, will live as well or be as successful as you…

          It will not happen…

          As a perverse thought, these people may be the most “free” of us all…

  20. CCCB says:

    The problem is everyone is using dollars to value earnings (losses) and stock prices.

    If we just switch to crypto – my vote is dogecoin – then everyone is making huge profits!

    • Old School says:

      The main idea I think is if you are producing something really valuable at a good price whether it is electricity or cell phone or eggs then you have something valuable no matter the type of currency society pays you in. It is the value of the product and your efficiency in producing it that has the value.

  21. ivanislav says:

    One word: “Blitzscaling”

  22. Micheal Engel says:

    1) BTC/USD weekly : a compact patterns of the gold chart. Condensed, but similar. Crypto Dec 2017 is the 1980 peak in gold. Crypto Apr 12 2021 is Sept 2011 high in gold. Between them a large accumulation zone. etc.
    2) BTC/USD backbone #1 is Jan 4 high & 18 low. No bubble can rise without a backbone.
    3) BTC?USD exceeded it’s first major target. It can still move higher to the next ones, but the selling tails at the top – Oct 18 and Nov 8 – might indicate a change of direction.
    4) The reaction might decay to the backbone, or an anti bubble that will breach it.
    5) So is gold.
    6) if China, one day, will declare an economic war and impose an embargo on US, like the oil embargo in the 197’s, US inflation will explode.

    • Mr. House says:

      “6) if China, one day, will declare an economic war and impose an embargo on US, like the oil embargo in the 197’s, US inflation will explode.”

      Pretty sure they already did, but the media didn’t tell you so it can’t be real.

  23. Micheal Engel says:

    7) China depleted US gold from our vaults. If gold decay, it’s an opportunity to buy at bargain prices to protect yourself and your family, in case of exploding inflation.
    8) So did India and Russia. They are accumulating gold.

  24. Ron says:

    China-Russia also keep there mined gold as a Japanese emperor said 3,000 years ago ,people can’t eat it

    • BuySome says:

      Fortunately for them, Japanese rulers never had to concern themselves with electro-tech, space applications, or any new to-be-discovered uses for precious metals. Neither did they have to worry about a worldwide population that depletes the easy-access supply in short order. But they did need metals for the swords that kept them in power.

      • COWG says:

        “ But they did need metals for the swords that kept them in power”

        And it worked great until the Great Battle of Ruh-Ro…

        When the Chinese introduced their new friend… gunpowder…

        • BuySome says:

          And naturally, mass production of gunpowder is still dependent upon metals to make the whole show go on. Better use of raw materials must be learned, or consequences must be suffered.

  25. Seneca’s Cliff says:

    When I was in college the Bhagwan Shree Rajneesh moved his sidekicks to a huge ranch in Eastern Oregon. He then attracted hundreds of starry eyed followers ( mostly from California) and enticed them to give him all their money. He then drove around In one of his 100 Rolls Royces while his now penniless followers gathered to worship him. It seems like the Bhagwan is the true father of today’s stock market and tech economy,with Musk , Neumann etc. playing the part of the Bhagwan.

    • BuySome says:

      He would have got nowhere without his crew of minions. Same for Helter Skelter Chucky, the energy sucks, and every other scam movement in history. It’s not the hoard of dept. store Santas that worry me, it’s all the elves making toys with the promise of a white Xmas at no cost. Got snow shovels?

  26. Mr. House says:

    Its just a smaller version of the overall US Economy in my opinion

  27. Augusto says:

    I was going to call this a “Zombie” company. However, as I recall from horror lore most Zombies were once alive. This thing has never been a functioning business. It’s business model simply doesn’t work and never will. It’s a fake “enterprise” made up for conmen and speculators from all the printed money kicking around. How much longer this fakery and money printing can go on without financial reality making an appearance is the only question for me.

  28. c1ue says:

    WeWork is why I’m extremely cynical about the entire Silicon Valley startup scene.
    They are the most extreme, but their business model is no different than Uber, Lyft, etc etc: lose money hand over fist but huge market caps and “make it up in volume” someday.
    Not to mention massive societal disruption/destruction.

    • Wolf Richter says:


      The funny thing is WeWork is no longer a startup. It’s an 11-year-old global company.

      • BuySome says:

        Covid accomplished the same growth must faster. I don’t think I want ownership shares in it, though. It might kill someone I share this planet with.

  29. Depth Charge says:

    Just think of what all this money could actually do if it were put to good use. Instead, the reckless, arrogant, fraudulent, greedy, reprehensibly filthy FED has destroyed the economy and created corporate freakshows such as this.

  30. Xavier Caveat says:

    What we worry?, uttered Neumann.

  31. Micheal Engel says:

    Anti bubble : PayPal

  32. MonkeyBusiness says:

    Next Wolf Street article: how can a company that has only delivered 150 cars have a higher market cap than Volkswagen?

    Tesla is old news. Here comes Rivian.

  33. Micheal Engel says:

    If SpaceX have an “event”, Ilan axed and TSLA plunge < 400.

    • Petunia says:

      SpaceX has escaped the event horizon. No event will matter because Musk has already made more progress than NASA and the other foreign space agencies. Musk is the space program.

      • BuySome says:

        Joy! I’ll forward him a genuine cadet patch from the ’80’s with an MTV button for good measure.

  34. Khowdung Flundhi says:

    History doesn’t repeat itself, but it does rhyme:

    “A slapstick comedy-musical starring Gene Wilder, THE PRODUCERS features two con artist/Broadway producers who plot to swindle old women into financing the most awful musical ever staged. Their ultimate goal is to have the musical bomb, pocket all of the receipts, and then disappear to a beach in Rio de Janeiro.”

    • BuySome says:

      Hopefully without having to listen to a future chorus of Springtime for you-know-who.

  35. Michael Gorback says:

    This is so simple. Ask any 11 year old who broke the lamp and the answer is always “I don’t know”.

    • BuySome says:

      Kids are smarter and more evil, so depends on who asks. If it’s grandpa, they say “Don’t you remember it was already cracked and re-glued. Say nothing and I won’t have to tell my parents to lock you up for the obvious memory failures!” Real easy to pass off blame for mistakes to someone else’s watch nowdays. Thank god for advanced edjumaction!

  36. They are in Asia, expanding, they raised revenue and they have cash on hand. This is the way M&A functions. They build too much of something, (restaurants for instance) and instead of allowing the industry to go through a painful contraction, a SPAC marketing firm(?) consolidates assets within the industry. If this was fast food, maybe they would buy up the best franchises and put it under one rubric, like Foodcourt inc, where you can get anything, delivered, to your rented office space. Commercial office space avoids the worst part of the downturn. The financial sector spreads risk, (or concentrates risk depending on your point of view) the new singular company can borrow cheaply, (probably with government subsidies) and eventually the economy recovers and people want office space again. Or they repurpose the assets. The financial system functions a whole lot better than it did a hundred years ago, especially in businesses which tend to have illiquid assets (like bonds which you have etfs, unlike those old bond funds which sometimes had to sell principle to make interest payments). And of course the government has their back. Should Weworks have more problems they take it private at $50 a share?

  37. Bobber says:

    Same old story. Slick salesmen promising riches to dimwitted investors. You could probably trace that pattern back to cave man era.

  38. Brent says:

    1.The “Tronics” Boom of the early 1960s = Tech Almighty Boom of today

    Investors were hungry for growth stocks, and the market provided them, as 1959-1962 saw more issues than at any other period.

    IPOs would trade at several multiples of their prices only weeks after the fact, and regular companies would add a “tronics” suffix to their names in order to boost their stock prices.

    In 1962, the party ended, with “growth” stocks suffering far more than the general market.

    2.Concept Stocks of the 60’s = Meme Stocks of today

    In the late 1960s, a focus on near-term stock returns led to a boom in “concept stocks”. These were stocks of companies with little to no revenue, but with compelling stories.

    Fund managers did not even have to believe the stories, they just had to believe that other fund managers would believe, and that would be enough to buy in, with the hope of selling to a ‘greater fool’.

    The pros lost a lot of money for their clients when the bear market of 1969-1971 destroyed the prices of these dream stocks.

    In the 70’s investing mania abated and fleeced investors found consolation in Pet Rocks and Mood Crystals.

    Lucky ones closed their brokerage accounts,cashed $2 check for the remaining balances and went to the movies to watch “Emmanuel” or “Texas Chainsaw Massacre” 😁

    • Xavier Caveat says:

      “The Go-Go Years: The Drama and Crashing Finale of Wall Street’s Bullish 60s” by John Brooks is the very chronicle of the 60’s stock market you want to read, the daily volume was such that there was a 2-3 day lag time between sales and matching up of physical stock certificates. The hot stocks were often conglomerates (think AMF Harleys) that tried to be everything to everybody.

      There was no bailing out of anybody when the market laid an egg in 1970…

      • Brent says:

        I stumbled upon John Brooks too because he was a co-author with Michael Lewis whose “Liar’s Poker” is a coffee table book.

        Bearish 70’s were all about conglomerates aka Nifty Fifties.

        80’s were about buying conglomerates with OPM (other people’s money or LBO),dismembering them and selling pieces at a profit.Movie “Pretty Woman” mentions this trend and movie “Wall Street” is all about it.

        • Petunia says:

          Back in the early 1980’s, a neighbor in NYC was a secretary at Drexel when Micheal Milken was there, she made $80K a year. I never made that, even ten years later, being a techie at Bear Stearns.

        • Brent says:


          “Den of Thieves” (last month it became available on audio) contains interesting trivia about NYC in the 70’s-80’s.

          Marty Siegel rented 1br apt on UWS for $220 in the early 70’s

          And the clerk selling subway tokens was making $200 per week.So,in theory,you all could be UWS neighbors 😁

  39. Jake W says:

    wework markets itself as a tech disruptor, but all they really doing is leasing space and then reletting it. it’s not a new model and it’s not revolutionary, which is why their insane valuation was never justified.

    plus, there are zero barriers to entry. anyone can do what they do. in fact, many buildings have created shared spaces themselves. why pay a middleman?

  40. Michael Engel says:

    A bearish option : UST10Y weekly to 0.65%.

  41. David in Texas says:

    Great article, Wolf. 11 years of losses shows their business model is not fixable. Unfortunately, there’s no practical way to make money from this knowledge. The shares are hard to borrow; and shorting WE would expose traders to the risk of being Gamestopped.

    The options are very expensive, since the market makers see the same things that Wolf has pointed out. If you get the timing just right, it’s possible to make a pile of money; but these things have always taken much longer to collapse that I would have ever thought possible.

  42. fred flintstone says:

    When I was in college ROTC at U of Illinois back in the Vietnam era I had to dress into my military uniform at the armoury because if we were caught by the anti war folks crossing campus we might be in trouble.
    I suspect if the FOMC does not do its job……relatively soon…..they will be feeling the same sort of heat… the people.

    • Jake W says:

      in their minds, they are doing their jobs. they just have a different idea of what “that job” is than we do (and what their charter states).

  43. Yossi says:

    WeWork is the magnificent job of a Israeli failed businessman that somehow managed to sell a dream.. He called WeWork a startup (yeah right) and tried to incorporate tech into it. Basically some idiot down the light bought that idea and realised they were fooled a little bit too late.

  44. CreditGB says:

    A game of Financial Musical Chairs:
    There are 793 million dancing around a total of 25 chairs while the music continues to play.

  45. daniel J kane says:

    I remember about 5 yrs ago when someone high-up at WeWork said WeWork was a ‘technology’ company.

    What nonsense, any high schooler would know they were simply a sublessor of office space.

  46. Arizona Slim says:

    I’m probably the only person here who actually has been part of a coworking space. For nearly four years, I was a tenant, oh, excuse me, a MEMBER of one in Downtown Tucson.

    This place was heavy on the use of lovely words like “member,” “collaboration,” and, of course, “community.”

    The reality? Well, I sure as heck didn’t experience much collaboration or sense of community.

    Neither did a lot of other people. Over time, I noticed that as people left, they weren’t being replaced by new tenants, er, members.

    And here’s the thing about coworking spaces: If you don’t stay on top of the turnover, you’re going to have a vacancy problem that only gets worse. That’s precisely what caused the demise of the coworking space I was in.

    Methinks that WeWork — with its 44% vacancy rate — is dealing with the same problem.

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