WeWork announces 1-for-40 reverse stock split to retain New York listing

L4sBot@lemmy.worldmod to Technology@lemmy.world – 77 points –
ft.com

WeWork announces 1-for-40 reverse stock split to retain New York listing::US office space group recently warned it faced ‘substantial doubt’ about ability to continue as a going concern

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I’m pretty much the target for this, I travel a lot for work and it’d be nice to have a place to “office” out of, but the competition here is:

  1. Free - Even after checking out of my hotel, the lobby always has a corner or two to work in and decent wi-if. 1a) I have status at one chain and they’re always great about just letting me walk in to any of the chain and suck up some internet and plug in my laptop, even if I wasn’t staying there. Bonus is that they usually have coffee!

  2. Free - my car. With tethering my phone to my laptop, I’ve done more calls than I care to admit by just finding a random shady place to park the car and get to work. 2a) The park (when it’s nice enough outside)

  3. Free- Libraries - The public library system is great. Not a good place to take calls, but if you need a place with a chair and internet to do some work, it’s an option.

  4. Free - Client’s offices. I have a good enough relationship with a number of clients that I can ask to take over an empty desk (one even has an empty office with a KILLER view of the city that they’re just fine with me taking over for a couple hours.

  5. Cheap - Coffee shops. Buy a drink (bonus) and grab a seat for a bit. They’re super abundant and you can almost always find one close to your next meeting.

I’m certain that WeWork has its benefits, but competing with free is pretty hard.

  1. If you’re not travelling, you often don’t have a hotel. You could argue that working from home is also an alternative though. People looking for a WeWork may be trying to separate home and the office though, or escape distractions like children or roommates.
  2. I could see doing this in your car for a short period, but not an entire day. It will get hot, cold or hard to breathe. Not to mention street noise.
  3. Yes, though most libraries in major cities are full of homeless people, which makes it a hard regular option. It might work fine one day, but another day might be overcrowded. I’m guessing people getting WeWork are looking for some regularity.
  4. Sure, again works for a day or two. Not a long term solution. No client will let you work there everyday without eventually charging you rent.
  5. Yes, you can certainly do this for a couple hours. After awhile you gotta buy another coffee or lunch. It will start to get expensive. Also, doing this everyday in the same location may start to become weird or get you kicked out.

WeWork isn’t targeted at people who need an occasional office, but people that don’t have a traditional office building and need a regular, stable workspace.

All good points. I have a nice home office and a desk at HQ that I can go to. I guess I’m not the target market.

Good one, McGill. Now ask yourself in which of those places you can meet a client twice and still keep them on.

McGill?

For a client meeting I prefer a nice lunch place or just to meet at their office? I do have a FEW clients that work out of their homes. They’ve always been happy with whatever coffee shop is close to them.

It's the coffee shop. But I can only speak from experience.

Of course you might be working in an industry where a certain level of huffing clients' farts is required, however, the vast majority aren't.

Realistically yeah, the coffee shop was the only plausible one. But coffee shops won't be the downfall of coworking space because (1) there are clients who simply don't like talking business in a public place and (2) coffee shops only work if the number of people who use them that way is small and/or only do it occasionally. If everbody constantly used coffee shops for that it would stop being fun for all those involved really fast.

You can definitely meet clients twice in a cafe.

Now, I'm not as smart as the refined folk at the FT, but I think the word they are looking for is "merge", not "reverse split".

finance is full of that kind of terms that would even be goofy if they weren't that misleading.

when the economy contracts very often is called 'negative growth'.

It’s because broad adoption of the existing term -> fewer misunderstandings if you just use a variation. Anyone with even passing knowledge of stocks has heard of splitting. The inverse is so comparatively rare that the term wouldn’t be widespread enough to be as immediately understandable as the (admittedly dumb sounding) reverse split.

In part because stock merge could feasibly be multiple things. Stock share merge is more specific, but that’s three words that don’t flow very well rhythmically. A reverse split can only be one thing and is the most layman friendly.

Merge implies more than one company merging together to become one, which I'm guessing is why we have the term "reverse split"

Not exactly sure why WeWork is in such trouble. It's a growing and attractive industry after the pandemic, and several competitors are doing very well in the current market.

They are overpriced, and have no real value except in very niece situations. This video explained it pretty well I think: https://youtu.be/IiO9eSd_v4E?si=8jh404sxNtFqLhIk

I agree with you and I've given this a lot of thought over the last year or so. I think the problem is that the need for shared/rental office space isn't in the big cities where WeWork has its locations, it's closer to the suburbs where the people that WFH live. The folks that WFH who either don't have adequate space in their home or prefer to go to an office to work would consider a rental office space but don't want to have to commute into a major metro area to work. The office space would need to be closer to where these people live and offer a shorter commute than going into your company's office.

In my area I see a lot of vacant commercial space in areas like strip malls or "main streets" that would make great co-working spaces. These are likely cheaper to lease and are closer to where people live making the commute manageable. As an added bonus it could have a positive effect on the local economy (coffee shops, lunch spots, etc.).

People in suburbs often do have the room for a home office though. And if you prefer to go to an office, it’s probably to work with your coworkers. No chance they want to drive to your suburb.

The people in the city that live in a 1-2 BR apartment definitely don’t have room for home offices.

The real problem for wework is it’s an insanely easy model for LLs to copy and disintermediate them. If it were worthwhile business.

It’s much too expensive at any scale - and subscale, well, people outgrow it.

I don’t know the company’s finances, but my guess is the concept can be successful, but WeWork may have taken on too much debt or over-extended itself in its rapid growth period.

A company that is expanding more strategically and with an eye on the bottom line might end up doing fine.