WeWork – Cash Out Vibe

Cash out vibe? Loaning millions of dollars to yourself from a company posting losses in excess of revenues. Adam Neumann, the C.E.O. of tech “start-up” WeWork, which started in 2010, is what everyone is talking about. Investors are whispering to each other, so as to not ignite the herd to sell everything, silently off-loading as much as they can, buying safer assets to keep the index high and not trigger a greater sell-off. Or maybe they are huddled excitedly, waiting for a crash so they can cash in on short orders and buy everything back up. Adam Neumann is there with them, telling them what to buy.

Who is Adam Neumann? A diversified investor. A capitalist to the core. He loans out as much as he can to buy as much real estate possible, purchasing “assets” (they are really liabilities at this point, intuitively). Now, as we sit at the top of bursting bubble… or the crescent of a new era of stability *cough*, He has some money stacked away, loaned to his company and then distributed to him, as well as controlling rights of the company, WeWork.

What do you do to fight this? You can’t dummy. It is a qualified, rational investor taking his most profitable investment and selling it when it is worth the most. You can try to regulate the amount of money that a founder could distribute, but this would lower the drive for profitable investment because of the increased costs, whether it be in time or whatever.

This does bring the question, though: how much of the billion dollar losses that are music to investor’s ears, are just distributions to people with controlling interests?

In any case, we can marvel at the brilliance of someone taking the silicone valley principles of innovating the customer experience, and all that, to attract greater and greater sums of money to build, what.. office space? It is a different vibe though, for sure.

We should not make business any less desirable, because if consumption is up and everyone is paid, everyone is happy. In fact, we can probably look at his behavior, a well-connected real estate mogul, as a signal to the rest of the market. In any case, if WeWork goes broke because they provide some information more alarming than a $1.9 billion dollar loss (doubtful…) then we know who heard it first.

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