Is WeWork Even Worth $8 Billion?

Richard B. Levine/Levine Roberts via ZUMA

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The WeWork saga is nearing an end:

SoftBank Group Corp. won approval from WeWork’s board to take control of the troubled co-working startup, in a deal that would hand co-founder Adam Neumann nearly $1.7 billion and sever most of his ties with the company….The deal is expected to value the company at about $8 billion, a far cry from what it was expected to fetch in an initial public offering earlier this year and even less than the $47 billion at which a January investment from SoftBank pegged its worth.

This whole thing is even crazier than it looks. For starters, the outside world has known for years that WeWork’s business model was nuts. The Wall Street Journal made that clear two years ago and there were plenty of hints years before that. The company was a nothingburger propped up by the mad stylings of Adam Neumann.

What’s even crazier is that SoftBank must have known this all along. It’s one thing for the outside world to be fooled, but Softbank was a major investor. They must have seen the books. They must have known about Neumann’s sketchy insidery deals. They must have known there was nothing really special about yet another office leasing company, even if it did “activate the space” and appeal to millennials. Space is space.

So how is it that within the span of ten months, SoftBank reduced its valuation of WeWork from $48 billion to $8 billion? Was their January valuation all just part of the scam?

And here’s another little nugget to chew on: even now, on a revenue basis, WeWork is valued at more than 5x the level of IWG, its stodgy old competitor that does pretty much the exact same thing they do. Even after all the revelations of the past few weeks, WeWork still looks plenty overvalued.

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Thank you!

We didn't know what to expect when we told you we needed to raise $400,000 before our fiscal year closed on June 30, and we're thrilled to report that our incredible community of readers contributed some $415,000 to help us keep charging as hard as we can during this crazy year.

You just sent an incredible message: that quality journalism doesn't have to answer to advertisers, billionaires, or hedge funds; that newsrooms can eke out an existence thanks primarily to the generosity of its readers. That's so powerful. Especially during what's been called a "media extinction event" when those looking to make a profit from the news pull back, the Mother Jones community steps in.

The months and years ahead won't be easy. Far from it. But there's no one we'd rather face the big challenges with than you, our committed and passionate readers, and our team of fearless reporters who show up every day.

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