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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Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

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SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

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