It is the chart of Enron.
History repeats all the time in the stock market. Fear and greed …rinse…repeat.
WeWork dare I say…may be the 2019 version of Enron.
Scott Galloway calls them WeWTF. I call them Weron or Enwork.
Whatever we call them, it has been fascinating to follow along the past month.
Scott Galloway has a great post up today that is worth reading. The kill shot…
It’s beginning to smell like malfeasance at We. The lines between vision, bullsh*t, and fraud have been crossed here. To be clear, I’m not a journalist, nor a forensic accountant. This is pure speculation based on my experience as a CEO, investor, and director. Something is very, very wrong here. In no specific order:
• The board’s willingness to sell shares at 75% off (after seven days) says insiders knew the firm desperately needed money, and the price they advertised seven days before was not a real number (see above: malfeasance).
• Cult of personality firms seem especially vulnerable to massive declines in value or fraud. If you had to pick an analog for Adam Neumann (young, charismatic, visionary, with an outsized view of himself and a delusional view of the firm’s role in society), surrounded by gravitas/old white guys, who/what is more fitting than Elizabeth Holmes/Theranos?
• At the most recent all-hands (after the shelving of the IPO), Adam refused to take questions. Mr. Neumann is a narcissist, and to not indulge in a chance to spread more Adam means he’s now being advised by lawyers (“stick to your talking points, don’t say anything else, don’t take questions”). A bad sign.
If you liked the Theranos documentary The Inventor: Out for Blood in Silicon Valley, you’ll love Community-Based EBITDA: The Story of We, coming soon to Hulu.
The next few months will not be pleasant for the Wework entourage.
My guess is this spills over into the public markets pretty soon.
http://howardlindzon.com/vison-bullshit-and-fraud/
Realist - Everybody in America is soft, and hates conflict. The cure for this, both in politics and social life, is the same -- hardihood. Give them raw truth.
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