Is We Work A Fraud?

Is We Work a Fraud? - Henry Hawksberry - Medium https://medium.com/@henry.
hawksberry/is-we-work-a-fraud-5b78987d3e61
To make Medium work, we log user data. By using Medium, you agree to our Privacy Policy,
including cookie policy.
Henry Hawksberry Follow

Sep 16 · 13 min read
12.1K
1 of 18 25/09/2019, 09:23
Is We Work a Fraud? - Henry Hawksberry - Medium https://medium.com/@henry.hawksberry/is-we-work-a-fraud-5b78987d3e61
Top highlight
Is WeWork a Fraud?
So in a nutshell, this is what we know about this charade so far, apologies:
1. Its not a technology company in any way, shape or form. No income is

derived from the sale of a product or service delivered by a technology.
12.1K
They owe $47 billion in lease commitments. Claiming WeWork is a
technology company is one of the many indicators that illustrate how
Adam & Miguel intentionally seek to mislead and defraud existing &
potential future retail investors. The product is physical space.
2. When asked what inspired him to create a shared workspace company,

Adam said that when he was growing up in Israel he used to live in a
Kibbutz and was so mesmorised by the ‘sharing ideology’ that he
invented Co-Working. Mark Dixon founded Regus in the 1980’s. LEO,
Workspace Group, The Office Group, ServCorp, MWB, HQ and many
others were around way before Adam thought up of this ponzi.
3. WeWork post full year invoices for the year ahead this year to inflate
their revenues. They then heavily discount those invoices they’ve
already raised and treat them as expenses. They then pay whichever
2 of 18 25/09/2019, 09:23
broker
To makesecured that
Medium work, welead 100%,
log user data. Byyes
using100% ofyou
Medium, the contract
agree value.
to our Privacy Note the
Policy,
industry standard commission is 10%. Neither the discounts nor the
100% in commission payments appear in their Financials as they are
‘community adjusted’. They also do the opposite, they turn expenses into
revenues so imagine a landlord agrees to discount their rent by £250k to
offset a portion of their build costs, standard practice, WeWork treats
12.1K
that £250k as revenue. They also charge members even after they’ve
vacated, then credit them later. It’s not difficult to boost revenues on a
blank cheque. Revenues are not what you’ve actually cleared through
your bank, it’s the total tally of invoices raised in a given period, a big
difference.
4. The expenses as detailed in their accounts & S1 disclosure is not

accurate. To hide two crippling cost groups; fit-outs & marketing, they
invented a brand new accounting principle which they called
‘community-adjusted EBITA’S’. If they hadn’t they would have had to
post actual accumulated losses in the region of $6 billion instead of the
$4 billion reported. Why don’t we all do this. This is another strong
indicator, they are hiding actual losses to mislead, knowingly. For
somebody that can’t go a sentence without throwing in ‘community’
3 of 18 25/09/2019, 09:23
twice it’sMedium
To make interesting
work, we he’s never
log user tweeted,
data. By his you
using Medium, instagram
agree to ourfeatures four
Privacy Policy,
landscape google images and he’s non-existent on LinkedIn.
5. A brief search on any review site should show you the extent to which
they couldnt care less about what their customers think. Despite rolling
monthly contracts being sold with 3/6 month rent free periods for
12.1K peanuts, with all the promotional freebies they provide, the free beer &
festivals, 100% commission rates to brokers, billions in instagram
adverts, 3 PR articles a day, none of their buildings are even near full
and they are already experiencing falling occupancy rates. They even
sent teams to walk into their competitor’s Centres to take photographs of
tenant directory’s. That’s how desperate it’s become. Regus is currently
engaged in legal action accusing WeWork of poaching customers and
they are not the only ones who have accused them of engaging in this.
6. Adam & Miguel have already collectively cashed out in excess of $1

billion in loans, royalties, salaries to extended family, private jets and
who knows what other instruments (e.g. selling the We trademark he
secretly purchased back to WeWork for a cool $6m), they’re chilling, and
reportedly less and less involved in the day to day running. Miguel is
more involved in a range of other businesses and has already demoted
4 of 18 25/09/2019, 09:23
himself from Co-Founder

To make Medium work, we log userto Head
data. of ‘Global
By using Culture’,
Medium, you quietly
agree to our positioning
Privacy Policy,
himself for a quick exit post-IPO. Adam on the other hand fancies
himself as the next Masayoshi, he has his own ‘venture capital’ firm
investing in genuine entrepreneurs. Why would either of them care what
happens to their remaining holdings, they’ve already cashed out enough
to set up their grandchildren for life.
12.1K
7. Adam & Miguel then used the funds extracted from WeWork and
funnelled it through privately controlled offshore investment vehicles
and almost overnight built an asset-rich portfolio of prime commercial
real estate (not an asset-light illusionary hustle). It doesn’t end there.
Adam & Miguel then lease those buildings they privately acquired. back
to their very own ‘spiritually’ valued WeWork at a ridiculously high yield.
Even the very founders are bleeding their own ponzi scheme dry. Are
these guys something or what. Further buildings were then acquired
with loans (from JP Morgan) totalling $500m hedged against their
already saddled collateralised. junk obligation WeWork. It’s not enough
that they’re making $230m in fees flogging this ponzi.
8. When they got caught, Adam tries justifying it by claiming he acquired

the buildings years ago as a way of proving the concept works. An
5 of 18 25/09/2019, 09:23
outright lie, and

To make Medium very
work, insulting.
we log user data. ByIfusing
Adam canyou
Medium, doagree
andtothen conceal
our Privacy Policy, all of
these things, imagine what else we don’t know.
9. With pressure mounting, he arranges to appear alongside his actor

friend Ashton Kutcher in an ‘Exclusive’ interview on CNBC . Ja Rule,
sorry I mean Ashton Kutcher, in his trademark goofy-like character plays
12.1K his part to perfection…. ‘When I realised it was a technology company I
also realised that this company, through its technology, has the greatest
capacity than any other company in the entire world to bring people
together’. He’s using an actor to convince people his act is for real.
(https://www.cnbc.com/video/2019/01/14/watch-cnbcs-full-
interview-with-ashton-kutcher-and-wework-ceo-adam-neumann.html).
10. The only reason it was valued at $47 billion is purely because one
individual in Japan bafflingly and solely invested a total of $12 billion,
in 9 separate funding rounds, each at double the price (and valuation)
he (and he alone) paid less than 6/12 months prior. Since Softbank first
invested in 2012, nobody else has invested. The only two people who
claim WeWork is worth $47 billion are Masayoshi Son and Adam
Nuemann. As long as we’re debating, and continue doing so until after
the IPO Adam & Miguel are loving it.
6 of 18 25/09/2019, 09:23
11. Why would

To make Masayoshi,
Medium an data.
work, we log user intelligent individual,
By using Medium, invest
you agree so many
to our Privacy Policy,billions
into this barefaced fraud, for the life of me I cant figure it out. Maybe
Adam & Miguel deceived Masayoshi & Softbank too. Or it could actually
really be as simple as it looks. It’s impossible for Adam and Miguel to sell
their shares on the secondary market or post-IPO for $100bn+ if
Masayoshi didn’t allow Adam & Miguel to parade WeWork in the press
12.1K
as being worth $47 billion, using purely Softbank’s 9 sole investments &
revaluations. Once they exchange, media outlets can run headlines that
project an aura that they are indeed worth what two people have
decided to value it at. Everybody in the loop benefits, from the early
investors that hope to offload their investments to later stage mugs, to
the media outlets and banks Goldman Sachs’ & JP Morgans who earn
hundreds of million in share sale commissions. Everybody wins. No one
is accountable.
12. Even Adam’s wife Rebekah, persuaded Masayoshi to sink $100m into
her very own pet-ponzi, WeGrow, ‘the future of education’. Cute no, his
and hers.
13. It was only until the Saudi’s threatened to pull their funds out of the
Vision Fund when Masayoshi reconsidered and decided to pull a
7 of 18 25/09/2019, 09:23
proposed further
To make Medium work,investment ofByausing
we log user data. whopping $16bn
Medium, you (which
agree to would
our Privacy Policy, have
brought the total amount invested in/borrowed by WeWork to a
laughable $30 billion, 15x what Facebook raised). This is what may have
alarmed Adam to quickly initiate the IPO. He may now be afraid that if
he agreed to delay the IPO he wouldn’t be able to re-submit later without
providing a more scrupulously drafted breakdown of WeWork’s
12.1K
finances. He may also be worried that if a permanent suspension of the
IPO happens, the company may not survive.
14. Adam & Miguel have consistently been way off any of their forecasts
made in their original pitch deck to investors (available online). He
forecasted profits of $14 million in 2014, $64 million in 2015, $237
million in 2016, $542 million in 2017 and $1 billion in 2018 (on
revenues of $3.6bn, a 36% profit margin). Their ‘community-adjusted’
accumulated losses amount to over $4bn, their actual losses are much
higher. WeWork sued a whistleblower who raised alarm bells in 2016
when she revealed how WeWork had slashed their profit forecasts by
76%. When Bloomberg revealed this, WeWork claimed that it had ‘over-
estimated’ what landlords would be willing to front in build out costs.
But according to Adam ‘Because we have 40% margins, we can choose
8 of 18 25/09/2019, 09:23
when toMedium
To make become profitable’.
work, we log user data. By using Medium, you agree to our Privacy Policy,
15. Two profitable serviced office groups, the largest IWG (Regus & Spaces)
and the most luxurious LEO, who collectively manage in excess of
3500+ centre’s have been on the market for close to 2 and half years
now and they have not been approached by anybody willing to pay a
12.1K multiple of more than 1.25x revenues, which would make IWG valued at
between $3/4 billion. SoftBank could have acquired four Regus’s for
their $12 billion and still have enough change to sprinkle some fairy
dust on top. Instead they’re losing one Regus a year.
16. Facebook raised $2.2 billion pre-IPO. Google raised $130m pre-IPO,
Ebay $6.9 million. WeWork has raised $14 billion so far, 7x what
Facebook required pre-IPO, 140x what Google needed and they’re not
even a technology company. Where has that $14 billion gone? They
raised $14 billion, have less than $1.5bn cash and have nothing to show
other than $47 billion in lease commitments and a portfolio of
supersized Starbucks’s which are beginning to look outdated and in
need of urgent refits. Airbnb on the other hand is a technology company,
has raised $4 billion and posted profits of $93m last year on $2.4 billion
in revenues. No money has been swindled out of Airbnb, they’re fiscally
9 of 18 25/09/2019, 09:23
responsible and
To make Medium taking
work, we log their time,
user data. waiting
By using Medium,for
youthe
agreeright
to our moment to IPO.
Privacy Policy,
No rush.
17. Serviced Offices as anybody in the industry will tell you generates
almost as much yield as your traditional commercial landlord, typically
2/3%. Serviced Offices used to be very profitable when there were few
12.1K half decent ones around but today they’re everywhere and desk prices
have collapsed whilst conventional leasing rates have held steady. It’s
not just been around since the 1980’s but now everybody’s getting into
it, even developers British Land & Boston Properties are beginning to
include it as part of their offerings. Now its purely a landlord play. Cafe’s
and Hotels are jumping in too, even brokers are building their own
platforms where they act as operator, Knotel, Instant Managed, CBRE to
name a few. Even Google have a platform, ‘Campus’, very cool place.
Adam though doesn’t think they’re come close to being a threat, ‘Our
biggest competitor is work itself’.
18. Serviced Offices is like the hotel industry only many times simpler, its
just desks, chairs, simple decor in common areas (plants & picture
frames), wifi, electricity, daily cleaning, plates and cutlery, and maybe a
plug in telephone handset. Or you can just hire one of the many
10 of 18 25/09/2019, 09:23
contractors WeWork
To make Medium useuser
work, we log (John Robertson
data. By using Medium,Architects, Oktra
you agree to our Privacyetc)
Policy,
although most floors are just glass partitioned boxes (they don’t do stud
walls). LEO, Spaces and some of TOG’s centres have always been more
beautiful with a far higher build quality than any of WeWorks offices.
Now that’s it’s a landlord play, you have a avalanche of landlords with
far a deeper understanding of interior design and office fit outs than
12.1K
WeWork will ever be able to outsource.
19. The Co-working side of the Serviced Office industry is not at all
profitable. Nobody makes money from co-working. Most operators
provide a little co-working alongside a largely 3/6 person partitioned
multi-office layout or around dead spaces. WeWork took out entire
floors and dedicated it to open-plan co-working.
20. How did this even begin? The earliest shareholders including a
gentleman called Mortimer Zuckerman were not just their landlords
AND seed investors. They also happened to own Fast Company and NY
Post which were instrumental in propping up WeWork in the press
before anybody knew who they were. The headlines they spun about
WeWork’s valuation and ‘meteoric’ rise was basically the shareholders
advertising their investments. Even Wikipedia’s page (throughout 2015
11 of 18 25/09/2019, 09:23
and 2016)
To make introduced
Medium work, we logWeWork
user data. Byas theMedium,
using ‘mostyou
innovative company
agree to our Privacy Policy,of
2015’, citing a Fast Company article.
21. WeWork even thought about setting up WeCafe’s, they want to be the
first ever to disrupt the ‘working-in-a-coffee shop-as a-service-space’. An
internal report revealed people are working at spacious, trendy hipster
12.1K designed coffee shops where they get not just a free table but also a chair
(and free wifi) all for the price of a cup of tea. If WeWork charged their
members a fraction of the market rate, half will vanish overnight. Or put
another way, when they want to start becoming profitable and all the
freebies come to an end it will feel like s rug has been pulled from under
WeWork’s feet, by which time Adam & Miguel will be long gone.
22. WeWork doesn’t pay the appropriate property taxes due on their UK
based centre’s. If you look at their Business Rates schedules of the
respective boroughs in which they operate in (available online) you’ll
notice that split their entire space into tiny cubicles. By doing so WeWork
avoids paying property taxes and earns tax rebates originally intended
for small businesses, $2.4 million to date. So they’re effectively being
financed by Her Majesty’s Government & the UK taxpayer too.
12 of 18 25/09/2019, 09:23
23. WeWork spends

To make Medium more
work, we logon
userPR than
data. anything
By using else.
Medium, you They
agree to ourare carefully
Privacy Policy,
written with the subtle intention of building an impression that the
company is a roaring success, they pay for many of these articles. Some
are even co-written by WeWork’s PR team. Every month they pay these
new breed of digital financial news tabloids like Fast Company to write
sensational headlines like ‘The Rise of WeWork’ & ‘How WeWork become
12.1K
a $47bn company’.
24. If you are not already acutely aware that Adam Neumann and Miguel
McKelvey are fraudsters, count the number of times the word ‘Hustle’ is
plastered in neon lights at every one of their tacky ikea-designed offices
(or just google the words: wework hustle and click on images).When
asked whether how they could come up with a $47 billion dollar
valuation, he replied ‘”No one is investing in a co-working company
worth $20 billion. That doesn’t exist. Our valuation and size today are
much more based on our energy and spirituality than it is on a multiple
of revenue.”. When Miguel was asked about their $20 billion valuation
(before it was almost tripled to $47bn), Miguel McKelvey answered
‘Who gives a s***?’.
25. There are many people out there who give discreetly to charity, some
13 of 18 25/09/2019, 09:23
give generously
To make but
Medium work, weonly with
log user data.the fanfare,
By using Medium,some ‘pledge’
you agree to bePolicy,
to our Privacy charitable
largely for the PR impact but have no intention of giving, this is
something new. Adam, his wife Rebekah & Miguel have ‘pledged’ to give
$1 billion they don’t have and yet to swindle out of WeWork (not the last
billion, the next billion) so they can acquire more land to help mankind
and support environmental causes ‘close to their heart’. Is this the
12.1K
twilight zone? Where did the first billion go? Why do they feel the need
to use meaningless philanthropic pledges to make themselves appear to
be good wholesome folk, generous not greedy, charitable and tax-free.
WeWork’s cleaners have twice protested over wages. Everything is fake.
WeWork will never ever, in its short history, generate a profit, let alone the
tens of billions in revenues necessary to generate anywhere near the $3
billion in earnings required to (even then generously) value the company at
£47 billion.
A lot of people could have done what Adam Nuemann & Miguel McKelvey
did, they don’t because they’re not prepared to engage in a fraud. They can
play dumb all they like but when you fiddle with your financials, invent
accounting principles, secretly acquire IP and double deal it for millions of
14 of 18 25/09/2019, 09:23
dollars backMedium
To make to your own
work, company,
we log user data. Bymarket yourselves
using Medium, misleadingly
you agree to as a
our Privacy Policy,
‘technology’ play, cash out close to $1 billion and use that to acquire
buildings to lease back to WeWork, employ half your family etc, etc, etc…
please for heavens sake don’t try and convince me that they are unaware of
what they are doing. They know exactly what they’re doing. Adam and
Miguel purposefully choose to hide those costs under ‘Community-Adjusted
12.1K
EBITA’s’. Why are they still parading WeWork as a technology company,
does anybody believe as cunningly intelligent as they are, that they
genuinely think WeWork is a ‘technology’ company? Why have they cashed
out, and not just a few million dollars as a deposit on a big mortgage but
hundreds of millions to buy buildings that they used to further bleed their
own ponzi scheme with?. They have cashed out $1 billion whilst posting
losses of $1.9 billion.
Since their S1 release, Adam & Miguel have slashed their proposed post-IPO
valuation by 86% in 4 re-valuations. The price started at $67 billion, then
they quickly dropped it to $30/$40bn before again looking down at their
calculator and punching buttons quicker than you can blink and coming
back with $15/20bn. As you’re about to click, it plunges 40% to $10bn.
From $67 billion to $10 billion in 7 days. It’s pathetic seeing this kind of
15 of 18 25/09/2019, 09:23
desperation. I don’t
To make Medium want
work, we logto bedata.
user in the room
By using when
Medium, youhe realises
agree it’s not
to our Privacy Policy,even
close to being worth anywhere near $1 billion. Within the last 10 days or so,
his wife Rebekah has also removed from her extraordinarily unnecessary
position, they’ve hastily elected their first female to their Board, halved
Adam’s voting power, lost a Chief Communications Officer, their bonds are
crashing, two landlords have begun legal proceedings, their principle
12.1K
investor Masayoshi has publicly called for Adam to delay the IPO, even
Alexandria Ocasio-Cortez weighed in and warned vulnerable investors
Goldman Sachs & JP Morgan are now targeting… ‘you’re getting fleeced!’.
It’s not all bad news though, Adam agreed to return the $6m he swindled
when he secretly sold ‘We’ back to his company The ‘We’ Company. Btw, if
you’re wondering why he settled on the name. ‘We’ he pontificated recently
‘The ‘90s and early 2000s were the i decades. iPhone, iPads, the iPod –
everything was about me. Look where that got us? In a terrible recession’.
To wrap up, if you were to contrast the key characteristics of what defines a
ponzi scheme with what we already know about WeWork, I think we could
safely assume beyond a reasonable doubt that WeWork is a fraud, both
Miguel McKelvey and Adam Neumann seem to be knowingly engaging in a
fraudulent ponzi-like scheme designed to mislead investors and they appear
16 of 18 25/09/2019, 09:23
to beTonothing more
make Medium than
work, your
we log user average, traditional,
data. By using runtoofourthe
Medium, you agree mill
Privacy Policy,
fraudsters, or in their own words….’Hustler’s’. The magnitude of this fraud
and the unprecedented arrogance in which it’s being ruthlessly executed
puts it in a league of its own. Now they’re hoping to hustle the big boys on
Wall Street, and they will most likely get away with it.
12.1K
The most discomforting element of this whole deception is that after
perpetuating this fraud for so long, media outlets are now inviting these
Hustlers to media-sponsored ‘leadership’ events where they’re put on
podiums to teach us how to become visionary’s whilst they have now made
it unnecessarily more difficult for genuine entrepreneurs & technology
companies to raise capital in future. The future is farther because of them.
Note: Thank you for all your comments, very much appreciated. This is the
first article I’ve ever written (and only because its beyond anything I have
ever come across and it made me cross). Apologies for the grammar,
punctuation and lack of citations, you should be able to find most if not all
of the points made above by searching relevant keywords on Google. I
learnt the majority of the above from the exceptionally brave journalists at
the FT, Bloomberg, Wall Street Journal and The Real Deal who broke these
17 of 18 25/09/2019, 09:23
stories.
Startup Wework Fraud Business Softbank
Discover Medium
12.1K Make Medium yours Become a member
Welcome to a place where words matter. On Follow all the topics you care about, and we’ll Get unlimited access to the best stories on
Medium, smart voices and original ideas take deliver the best stories for you to your Medium — and support writers while you’re at
center stage - with no ads in sight. Watch homepage and inbox. Explore it. Just $5/month. Upgrade
About Help Legal
18 of 18 25/09/2019, 09:23

Is We Work A Fraud?

Caricato da

Informazioni sul documento

Titolo originale

Copyright

Formati disponibili

Condividi questo documento

Condividi o incorpora il documento

Opzioni di condivisione

Hai trovato utile questo documento?

Questo contenuto è inappropriato?

Copyright:

Formati disponibili

Is We Work A Fraud?

Caricato da

Copyright:

Formati disponibili

Is We Work a Fraud? - Henry Hawksberry - Medium https://medium.com/@henry.

Henry Hawksberry Follow

So in a nutshell, this is what we know about this charade so far, apologies:

1. Its not a technology company in any way, shape or form. No income is

2. When asked what inspired him to create a shared workspace company,

4. The expenses as detailed in their accounts & S1 disclosure is not

6. Adam & Miguel have already collectively cashed out in excess of $1

himself from Co-Founder

8. When they got caught, Adam tries justifying it by claiming he acquired

outright lie, and

9. With pressure mounting, he arranges to appear alongside his actor

11. Why would

23. WeWork spends

Startup Wework Fraud Business Softbank

About Help Legal

Potrebbero piacerti anche