So is this a thing now? That all new high-valuation tech companies of the last generation (Uber, "We") have to have some shady founder/CEO thing going on?
Being honest doesn’t garner press coverage. Ever hear of troubles at Twilio, PagerDuty, etc? I have not (disclaimer: no investment in either, happy customer of both).
Is it, I think saving disclaimers for when they actually matter is more important. If everyone included disclaimers listing their inconsequential relations to companies they would quickly be ignored as noise(which they would be).
I doubt the amount of shady CEOs is any worse than it was at times in the past (the 80s being known for the "Gordon Gekko" type CEOs immediately come to mind). I think it just feels like there's more corruption because of a combination of us consuming more media, quicker and recency bias.
1. The numbers are a magnitude larger, instead of 100's of millions we're talking billions for the individual players.
* Today's villains are far more disingenuous about their motives. In the 80's they unapologetically embraced greed for greed's sake, none of this false "making the world a better place" BS.
We're in an investee's market right now. Investors are throwing large amounts of money at anything that might have a positive return. This gives the founders/CEOs/etc. a lot more power to get away with this kind of stuff. If their behavior scares off one investor, there will still be a line waiting to give them money.
When things swing the other way, and not as much money is floating around waiting to be invested, investors will be able to hold the investees to higher standards.
I don't think it's that shady, I'd much prefer founders having power over investors having power. If you've been on HN for a while you've heard way more stories about investors exploiting founders and ruining companies and lives. Both sides should be protected but yeah there exists a bias I'd rather it be on the founder side than the investors.
I'd strongly suggest the book. It goes into amazing detail and is super well written. I'm generally more into literature when not reading work related things. This was just fun to read.
A true genius would increase his net worth by building a successful business. If you're not clever enough to do that though, there's always self-dealing.
He is building a successful business, it's just that that business isn't necessarily WeWork. I don't hold their stock, I'm not one of their VCs, what he and WeWork do is not my business, I have no quarrel with it.
Precisely, the successful business may be him acting as vendor to which WeWork outsources various things. So he's the CEO, and uses company resources to outsource some of his responsibilities. It's just that he's also the person that is receiving those outsourced responsibilities. I'd like to try that myself-- "Hey boss, I can't do all of this work. I think we should outsource it, and I know just the person for the job, he's already familiar with the work, has free time, and is standing right in front of you!"
It's not clear that it's possible to build a successful, long-term business by shouldering all the long-term risks of owning office space, and leasing it out at short-term rates to startups.
In that situation, the smartest move is to plunder your investors and shareholders for everything they are worth.
Sure, but in this case "smart" may also != "legal". Breach of fiduciary duty would seem to come into play, especially after an IPO when activist shareholders may rise up and make a stink about it.
I think that line of reasoning might take us to a realm where plundering is always the smart option, offering certainty where the alternative is risky.
It is not completely legal though. Someone like a CEO has a fiduciary responsibility to act in the best interests of the company. "Breach of Fiduciary Duty" is a real thing, and opens you up to liability for actual loses as well as punitive damages. So while I understand why the CEO would do this, it's probably a good idea to step back from that activity, especially on the verge of an IPO where the investor market might take a hard pass at a company whose CEO appeared ready to strip the enterprise for parts and abscond with the proceeds.
"Breach of Fiduciary Duty" sounds like one of those things that you're supposed to do, but which is almost impossible to prove (after all you just have to claim "I thought it was a good idea" and you're covered), and so is basically never enforced. It's the kind of rule that ethical, good CEOs worry about, and the kind of rule successful CEOs don't waste energy on.
BTW, I notice that commenters often have wildly different views of what rules mean. To some, they mean something intrinsically, and it's the players duty to understand and abide by them. To others, rules mean nothing unless they are enforced, and even then you have tons of wiggle room (roughly proportional to the money you spend on your defense). (And these days there's a vocal third crowd that says the government shouldn't enforce rules against businesses of a certain size "because it makes us vulnerable".)
Yeah, I imagine it's hard to prove when the CEO just games the company's performance metrics to improve their compensation package, but self-dealing makes things at least a little bit clearer. I wouldn't be surprised if there's at least one activist investor lined up with plans to take advantage of the situation and start a shareholder lawsuit.
As for a good CEO vs. successful CEO, I guess I don't actually view the later as "successful", because their actions either hurt the company or at least hindered its success. I look at the failure of Sears, abetted by a self-dealing CEO, as a prime example of failure in this area.
> I think that line of reasoning might take us to a realm where plundering is always the smart option, offering certainty where the alternative is risky.
In a business with very risky long-term fundamentals, yes.
If you are trying to run a factory that makes widgets, or a store that sells widgets, or even a social network where people discuss widgets... There are obvious ways to build a successful business around these things. Just do what your competitors do, but better. It's very clear that a viable business can be made of this sort of thing, and that being a corporate pirate is just one of multiple ways of enriching yourself.
When your business consists of giving away a dollar for ninety cents, personal plunder is the only smart maneuver. Your shares aren't going to be worth the paper they are printed on, once the music stops, regardless of the heroic efforts you might, or might not undertake.
"Just do what your competitors do, but better" is indeed obvious. That would be the strategy. The tactics, however, are not so obvious, and the difficulty lies in execution. As just one of many possible example, even a great, visionary CEO might fail in the face of a stagnant workforce unable to adapt to the changes as capital runs out and debt runs high. And great, visionary CEO's are exceedingly rare.
Further, you assume that legitimate compensation would exceed what a predatory CEO could extract by self-dealing and gaming performance metrics. Even a successful business may have much more upside for the CEO in self-dealing rather than long term hard work. Why put in the hours to increase your legitimate compensation package when instead you can siphon the same or greater amounts via self-dealing? Or even just half of that, but in a tenth of the time before moving on to the next victim company?
> A true genius would increase his net worth by building a successful business.
Which would mean not having pesky VC's with massive liquidity preferences.
Neumann is playing very efficient cards, his problem is trying to simultaneously portray this as something the public market should invest in.
Everyone gullible enough to consider WeWork shares on the public markets as validation - aka ALL the employees - should re-evaluate. Let the shares float, but no need for the lead underwriters to hold up syndicate bid, just let it float to its natural share price without the window dressing.
Ergh, the lead picture in the article is terrible and paints him in a significantly negative light. I'm not a huge fan of WeWork's business model especially with the tax law exploitation in the UK but I find it quite irresponsible for newspapers to cherry pick such terrible photos - just like - don't have an extreme face closeup, get a picture of him standing on a stage[1] and don't pick one that makes me wary this article is 100% slant... Because the We trademark was terrible and I really want to read an informative piece on it, but suddenly I have zero trust in this article.
Either way, it's still true that he used his position as CEO to outsource trademark creation to himself, and has now reversed that move. Also, other self-dealing.
Yes, I don't think anyone can deny that the CEO has done some very shady dealings, including selling stock right before the IPO, selling services to the company, leasing real estate back to the company and so on.
It's less about the actual transaction and more about the structure that permitted it and the capricious willingness to do it. There are red flags all over the place with this company, and the optics of him doing that just adds more fuel to the raging inferno of terrible governance.
I'm just kidding guys. I was just testing to see if you really cared about corporate governance. You passed the test! Now look at the top line and my super special non-GAAP sauce! Now with 100% less GAAP!
I am actually a bit surprised this isn't illegal - it seems like the CEO purchasing the "We" trademark would likely violate an NDA or possibly be pursuable under corporate espionage laws - he essentially sniped the domain once the company restructuring was on the road map...
Alternatively the shareholders might be able to go after him for some conflicts of interest - he manipulated the company restructuring to pick a particular name after personally securing the rights to it to force the company to buy it off of him...
Both these scenarios seem like things that should be illegal.
Very rarely do you see the person behind Scam Scheme #1 return the ill gotten gains in preference for the potential gains behind the much bigger Scam Scheme #2. This guy is all class.
Yup, pretty much - if you have facts to stand on then it annoys me when arguments are watered down with unsubstantiated claims. Put a balanced picture in, use neutral phrasing and let the dude's actions speak for themselves as you reveal the twistedness.
Starting with a baseless attack just weakens your reporting.
Maybe they should associate these photos with those hagiographies they usually write about business leaders instead of the ones showing them being majestic/gregarious/smart?
If the dude's actions reveal the twistedness, then the attack is not baseless. Also, keep in mind, the guy posed for that photo. It's not like he didn't know.
A lot of people care now because they just filed for an IPO, which is why he returned the money.
But if this was a private company and a co-founder thought he deserved $6 million for his efforts and wanted to label it as a trademark transfer, I see no problem with it.
Well that's the whole point. It is a public company so people should care, since investors should be aware of what they are getting into. If they invest in a company and money gets transferred to the owner in some funny ways, they should know.
The fact that this wouldn't apply if they were private doesn't really matter here, they are on their way to be public.
Is this a "who cares" as in it's none of our business, or as in he isn't doing anything wrong? Because generally when you work for a place, as an employee or CEO of anything in between, they own all of your work-related output. Better compensation in terms of salary, options, etc., is the way you're rewarded for strong performance. Self-dealing is generally regarded as a breach of fiduciary duty, and is punishable by repaying the loss along with punitive damages.
Most people are denied the opportunity to casually pick up $6 million for nothing and that money could have gone to increase salaries for people who are actually helping to keep WeWork running.
Why does WeWork increasingly look like one of those deals on Shark Tank that starts off looking great then goes way south when the sharks start probing?
I can see it now:
“Wait, so we’d be investing in your business which is leasing buildings from another business that you own... but we’re not getting a piece of that action?”
“Hold on, so we’d have to license the name of this company back from you and then you continue to get a royalty from that?”
“So what’s your revenue and how much did you take home last year? Sorry say that again?!?”
Pretty much as far as I can tell. My rule is that after finding more than one path where a company is generating metrics through a scheme where it is on both ends, I figure they are all in on the misrepresentation/fraud aspect.
There's a certain type of personality that sharpens their pencil over everything and anything. They are often zero-sum thinkers, who reason that if they aren't taking the maximum on everything, somebody else is taking advantage of their "generosity."
He's already offloaded a bunch of stock - he might just be trying to milk it for all it's worth before the price tanks post-IPO.
The beautiful thing is that CEO culture and reputation is such that having successfully lead a company to an IPO might be enough on it's own to land him a number of cushy board seats and future CEOing opportunities assuming he doesn't just grab the cash and run to Peru.
"In consideration of this contribution and in lieu of paying cash, the Company issued to WE Holdings LLC partnership interests in the We Company Partnership with a fair market value of approximately $5.9 million, which was determined pursuant to a third-party appraisal."
(Quoted by Matt Levine, I assume from the original statement)
To be fair, some of the offers those investors make are pretty awful and sometimes they treat the people on the show pretty badly. The show is mostly for entertainment and a lot of it is manufactured. If people go on the show trying to give them as little as possible while also getting promotion on tv, then I don't really blame them.
I will be very happy when WeWork collapses. Every time a jackass like this "graces" our industry, we are set back in the aftermath of the wake - it reinforces a false narrative that tech companies are bullshit.
I don't see how they ever even got the label of a tech company. It seems really just because they had lease terms that were very appealing to actual tech companies/startups etc., and then said "Hey, we should be a tech company too!" And people believed them.
Jason Calacanis suggested that the CEO should do this exact thing on his podcast last week. He also suggested he should tie up his shares longer to compensate for all the money he has borrowed against stock to show he is still long the company.
I would never invest in this company but it is good to see that at least people understand that this sale was shady.
Jason Calacanis predicted that he'd give the trademark back in this past Friday's episode of TWIST right at the 16:40 mark. But he didn't double his post IPO lockup which is the other thing Jason suggested that he do.
I've got a friend who runs a very successful co-working center. She competes against WeWork and said the first half of this episode is the single best discussion of the WeWork IPO.
Thanks very much for posting that, was very informative. My favorite tidbit was when Molly Wood was saying that she heard from a financial analysis firm that specializes in obfuscation that this was the most unclear S1 they had ever seen in terms of hiding basic financial metrics, and the other guest said he couldn't even figure out what the GAAP margin was after reading the S1. That to me is more damning than any other shenanigans.
Why wouldn't they clearly state the most basic financial metrics if this was anything else besides a steaming, raging dumpster fire?
For those curious, the other guest was Alex Wilhelm, a regular financial reporter of startups and their S1s. He's pretty well-equipped to dig into them.
He said in that video that the information contained in the S-1 was worthless. If in the know journalists are trashing it then who is going to be buying this stock?
At lot of comments here are saying "this is not evil, buisness people can and should do what they can get away with" (paraphrase) Some other comments point out why investors should object, even if it isn't evil.
I, for one, am grateful for this demonstration that transparency can work. I feel like the last several years have involved a lot of "here's someone/some company doing something really bad" and the world collectively shrugs. (I mean, lots of outrage too, but the shrugs win)
Here's a case where govt regulation (requiring the disclosure), people reporting, and individual reactions all did what they were supposed to do. (And I dont mean that the money was returned - I mean that there is sufficient pressure that he/the company actually feels a need to react).
Seems to me if someone is shorting We because they really expect a drop following this and just want in on the action to scalp what they can, are they really a sucker? Scalpers gonna scalp.
Underwriters are not allowed to lend out shares for short sale until 30 days after the IPO. Other investors could lend out shares but there are not going to be that many shares on the market right after the IPO.
You can make a OTC/private deal and you can buy puts and sell calls. I'll be spectating the book on day one, the underwriters might have to defend, really defend, not just touch the number like FB.
Most index funds won't buy because they aren't in the relevant index. Something like Vanguard's total market index fund would be an exception, since they buy everything. But it's market weighted, so maybe not that much?
I guess I can't blame him for trying (okay, I can and do), but it is a very brazen example of self-dealing. I'd really like to collect my normal compensation at the same time that I use company resources to outsource my work to... myself... and pocket that as well.
If I wrote a program that solves a problem for my employer, then turned around and tried to sell it to them or get royalties from them, it would be a huge conflict of interest, I’d likely get fired, and they’d take it from me anyway due to standard tech company IP reassignment clauses. But if I’m the CEO i guess it’s totally fine.
It turns out that although we employees are fêted as "Masters of the Tech Universe," Adam is a member of the Owner Class, and we are members of the Worker Class, and the two classes play by different rules.
The first of such rules is that Owners make the rules, and consequently those rules benefit Owners over Workers.
I'm ok with that, obviously, but being ok with something is not the same thing as being blind to it.
If you want to expand this greed-driven view to how absolutely whacky and double dealing this IPO is going to be add in the following:
1) If WeWork does NOT raise at least $3billion in this IPO they will be in default of a contingency with lenders that will WITHHOLD a committed $6billion credit line. (a)
2) This at first glance sounds sage, keeps the bankers honest in pushing the IPO right? When in fact the lending bankers ALONE will split a 3% up front loan fee - $180,000,000 - if their buddies down the hall can sell $3b of stock to bag holders in the IPO.
3) If you're lending $6b to a property landlord you'd want some strong guarantees right and again ensure the banks customers are being prioritized? Of course not - these WeWork loans will be "secured against cash and leases" NOT real property.
So the bankers, many of whom are involved in both the IPO and the unsecuritized loan, will FEAST on short term fees but of course believe in the long term viability of the business right?
Not sure why your being downvoted, if you think about it this is an interesting application for smart contracts where you need less or no intermediary between investors and owners.
Buffet's investment thesis strongly suggests staying away from companies with bad management teams. CEO seems like a self-dealer. I am going to stay away from this Stock.
The supposed valuation of WeWork gives us some incredible insight into the nature of "brand value" - it looks like their trying to capture the brand of the commons. I think the government is slightly complacent, given they let them trademark "We."
McDonald's isn't in the business of providing seats for people nursing a coffee for a couple of hours. Not that there's any shortage of people who spend at least some time working out of cafes and coffeeshops.
However, in general, those don't really substitute for an office. Even an open floor plan office like WeWork mostly is.
Yes, at the margins, if someone doesn't really need an office, WeWork or its competitors are sort of a luxury that can be done without. But if someone wants to/has to work outside of their home, possibly with co-workers, have meetings in conference rooms from time to time, etc., the local Starbucks is probably not going to cut it.
There is nothing in your statement above that seems remotely surprising to me. Now, I'm extremely bearish about WeWork, and their financials (not to mention their governance) look horrible at least from my layman's eye, but you seem to be arguing above that WeWork is overvalued based on the comparison to a real, physical asset.
If there is anything the Internet has shown, it is (unfortunately, IMO) that all the money is to be made in marketing, not in actually building or selling things. I mean, Google absolutely rakes it in with AdWords, while all the businesses actually buying AdWords to sell real products often lose money (Mary Meeker's latest report showed how customer acquisition costs are starting to exceed the lifetime value of customers!!)
Thus, in and of itself, I don't find it odd that a marketing and management company like WeWork is worth more than the products they rent.
That's comparing apple to oranges though. Construction cost doesn't include land value, and WeWork is basically re-renting land and equipment. The construction costs are the least important part of what WeWork does.
My point is that short term lease contracts are less valuable than the thing you lease otherwise there is no point in leasing. A silly comparison for a silly valuation.
$70/sq.ft is pretty average for Manhattan. I expected higher for this building. I guess the location isn't all that attractive. I'd personally prefer something near the Bryant Park.
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[ 2.8 ms ] story [ 191 ms ] threadThe whole Web 2.0 and beyond phenomenon is about getting some other sucker to over-pay for what you built before you run out of money.
1. The numbers are a magnitude larger, instead of 100's of millions we're talking billions for the individual players.
* Today's villains are far more disingenuous about their motives. In the 80's they unapologetically embraced greed for greed's sake, none of this false "making the world a better place" BS.
When things swing the other way, and not as much money is floating around waiting to be invested, investors will be able to hold the investees to higher standards.
[0] WeWork’s CEO Makes Millions as Landlord to WeWork - https://www.bizjournals.com/sanjose/news/2019/01/16/wework-c...
I'm reminded of the title of a book I read: https://en.wikipedia.org/wiki/The_Smartest_Guys_in_the_Room_...
In that situation, the smartest move is to plunder your investors and shareholders for everything they are worth.
interesting definition of "smart" you're using
It is not completely legal though. Someone like a CEO has a fiduciary responsibility to act in the best interests of the company. "Breach of Fiduciary Duty" is a real thing, and opens you up to liability for actual loses as well as punitive damages. So while I understand why the CEO would do this, it's probably a good idea to step back from that activity, especially on the verge of an IPO where the investor market might take a hard pass at a company whose CEO appeared ready to strip the enterprise for parts and abscond with the proceeds.
BTW, I notice that commenters often have wildly different views of what rules mean. To some, they mean something intrinsically, and it's the players duty to understand and abide by them. To others, rules mean nothing unless they are enforced, and even then you have tons of wiggle room (roughly proportional to the money you spend on your defense). (And these days there's a vocal third crowd that says the government shouldn't enforce rules against businesses of a certain size "because it makes us vulnerable".)
As for a good CEO vs. successful CEO, I guess I don't actually view the later as "successful", because their actions either hurt the company or at least hindered its success. I look at the failure of Sears, abetted by a self-dealing CEO, as a prime example of failure in this area.
In a business with very risky long-term fundamentals, yes.
If you are trying to run a factory that makes widgets, or a store that sells widgets, or even a social network where people discuss widgets... There are obvious ways to build a successful business around these things. Just do what your competitors do, but better. It's very clear that a viable business can be made of this sort of thing, and that being a corporate pirate is just one of multiple ways of enriching yourself.
When your business consists of giving away a dollar for ninety cents, personal plunder is the only smart maneuver. Your shares aren't going to be worth the paper they are printed on, once the music stops, regardless of the heroic efforts you might, or might not undertake.
Further, you assume that legitimate compensation would exceed what a predatory CEO could extract by self-dealing and gaming performance metrics. Even a successful business may have much more upside for the CEO in self-dealing rather than long term hard work. Why put in the hours to increase your legitimate compensation package when instead you can siphon the same or greater amounts via self-dealing? Or even just half of that, but in a tenth of the time before moving on to the next victim company?
Which would mean not having pesky VC's with massive liquidity preferences.
Neumann is playing very efficient cards, his problem is trying to simultaneously portray this as something the public market should invest in.
Everyone gullible enough to consider WeWork shares on the public markets as validation - aka ALL the employees - should re-evaluate. Let the shares float, but no need for the lead underwriters to hold up syndicate bid, just let it float to its natural share price without the window dressing.
1. The standard CEO pose - ala Steve Jobs
Alternatively the shareholders might be able to go after him for some conflicts of interest - he manipulated the company restructuring to pick a particular name after personally securing the rights to it to force the company to buy it off of him...
Both these scenarios seem like things that should be illegal.
Starting with a baseless attack just weakens your reporting.
A lot of people care now because they just filed for an IPO, which is why he returned the money.
But if this was a private company and a co-founder thought he deserved $6 million for his efforts and wanted to label it as a trademark transfer, I see no problem with it.
The fact that this wouldn't apply if they were private doesn't really matter here, they are on their way to be public.
I can see it now:
“Wait, so we’d be investing in your business which is leasing buildings from another business that you own... but we’re not getting a piece of that action?”
“Hold on, so we’d have to license the name of this company back from you and then you continue to get a royalty from that?”
“So what’s your revenue and how much did you take home last year? Sorry say that again?!?”
It also screams that you ought to be closely auditing expenses from every member of the cxo team.
The beautiful thing is that CEO culture and reputation is such that having successfully lead a company to an IPO might be enough on it's own to land him a number of cushy board seats and future CEOing opportunities assuming he doesn't just grab the cash and run to Peru.
"In consideration of this contribution and in lieu of paying cash, the Company issued to WE Holdings LLC partnership interests in the We Company Partnership with a fair market value of approximately $5.9 million, which was determined pursuant to a third-party appraisal."
(Quoted by Matt Levine, I assume from the original statement)
They're not a tech company tho...
I would never invest in this company but it is good to see that at least people understand that this sale was shady.
https://thisweekinstartups.com/e969
I've got a friend who runs a very successful co-working center. She competes against WeWork and said the first half of this episode is the single best discussion of the WeWork IPO.
Why wouldn't they clearly state the most basic financial metrics if this was anything else besides a steaming, raging dumpster fire?
Reference: https://fortune.com/2019/08/20/wework-ipo-s-and-p-500/
I, for one, am grateful for this demonstration that transparency can work. I feel like the last several years have involved a lot of "here's someone/some company doing something really bad" and the world collectively shrugs. (I mean, lots of outrage too, but the shrugs win)
Here's a case where govt regulation (requiring the disclosure), people reporting, and individual reactions all did what they were supposed to do. (And I dont mean that the money was returned - I mean that there is sufficient pressure that he/the company actually feels a need to react).
It's a nice feeling, even if too rare.
Will it be daytraders? Index funds? Or just “suckers” that have a fear of missing out?
I’m not trolling, I really try to understand what reasoning those people have.
https://www.investopedia.com/ask/answers/05/062905.asp
It turns out that although we employees are fêted as "Masters of the Tech Universe," Adam is a member of the Owner Class, and we are members of the Worker Class, and the two classes play by different rules.
The first of such rules is that Owners make the rules, and consequently those rules benefit Owners over Workers.
I'm ok with that, obviously, but being ok with something is not the same thing as being blind to it.
why?
1) If WeWork does NOT raise at least $3billion in this IPO they will be in default of a contingency with lenders that will WITHHOLD a committed $6billion credit line. (a)
2) This at first glance sounds sage, keeps the bankers honest in pushing the IPO right? When in fact the lending bankers ALONE will split a 3% up front loan fee - $180,000,000 - if their buddies down the hall can sell $3b of stock to bag holders in the IPO.
3) If you're lending $6b to a property landlord you'd want some strong guarantees right and again ensure the banks customers are being prioritized? Of course not - these WeWork loans will be "secured against cash and leases" NOT real property.
So the bankers, many of whom are involved in both the IPO and the unsecuritized loan, will FEAST on short term fees but of course believe in the long term viability of the business right?
This should all end well.
(a) https://www.bloomberg.com/news/articles/2019-08-01/wework-se...
Some's going to have to pay for those expensive buildings, bonuses, suits and perks.
This company/its IPO is a shining example of what emerged from the way "we" decided to structure the US economy post 2008 recession.
However, in general, those don't really substitute for an office. Even an open floor plan office like WeWork mostly is.
Yes, at the margins, if someone doesn't really need an office, WeWork or its competitors are sort of a luxury that can be done without. But if someone wants to/has to work outside of their home, possibly with co-workers, have meetings in conference rooms from time to time, etc., the local Starbucks is probably not going to cut it.
WeWork claims 3,7 million m2 office space and a 47 billion USD "valuation", or 12 700 USD/m2.
So the valuation of WeWork per square metre they rent, is about the same as the cost of One WTC per square metre ...
https://www.sec.gov/Archives/edgar/data/1533523/000119312519...
That doesn't include land value, does it? A significant chunk of the lease is to pay for the land value.
If there is anything the Internet has shown, it is (unfortunately, IMO) that all the money is to be made in marketing, not in actually building or selling things. I mean, Google absolutely rakes it in with AdWords, while all the businesses actually buying AdWords to sell real products often lose money (Mary Meeker's latest report showed how customer acquisition costs are starting to exceed the lifetime value of customers!!)
Thus, in and of itself, I don't find it odd that a marketing and management company like WeWork is worth more than the products they rent.
1. Find a market that has no way of shrinking and where small and big money is being made.
2. Launch an app that you can market as a product, but that makes money from providing a service to small and big money business.
3. Profit.
https://www.rentnyoffice.com/one-world-trade-center-office-s...
My point is that short term lease contracts are less valuable than the thing you lease otherwise there is no point in leasing. A silly comparison for a silly valuation.