WeWork Shares Collapse - Death Throes?

It all started off positively as WeWork reported revenue for the second quarter that almost met the average analyst estimate (Revenue $844 million, +3.6% YoY, estimate $851 million).

“In a difficult operating environment, we have delivered solid year-over-year revenue growth and dramatic profitability improvements,” David Tolley, Interim Chief Executive Officer, commented.

 

“Excess supply in commercial real estate, increasing competition in flexible space and macroeconomic volatility drove higher member churn and softer demand than we anticipated, resulting in a slight decline in memberships.”

 

But then things started to go downhill...

Meanwhile, investors searching for a home for all that cheap money, have been only too happy to indulge such fantasies.

This matters because too many mediocre companies fail to live up to the hype, and shareholders – many of whom have been tasked with investing our money – are left out of pocket as result.

Neumann seems to have blinded people with the sort of cringeworthy words and phrases you might find tumbling out of the mouth of an obnoxious candidate on The Apprentice.

In reality, WeWork was little more than an office landlord trying to charge a premium for a desk with access to ping-pong tables and free craft beer. Yet, to listen to Neumann’s credulous acolytes in those early days you would be mistaken for thinking they’d uncovered the next Bill Gates.