Is WeWork Even Worth $8 Billion?

Richard B. Levine/Levine Roberts via ZUMA

Facts matter: Sign up for the free Mother Jones Daily newsletter. Support our nonprofit reporting. Subscribe to our print magazine.

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.

REAL QUICK, REAL URGENT

Minority rule, corruption, disinformation, attacks on those who dare tell the truth: There is a direct line from what's happening in Russia and Ukraine to what's happening here at home. And that's what MoJo's Monika Bauerlein writes about in "Their Fight Is Our Fight" to unpack the information war we find ourselves in and share a few examples to show why the power of independent, reader-supported journalism is such a threat to authoritarians.

Corrupt leaders the world over can (and will) try to shut down the truth, but when the truth has millions of people on its side, you can't keep it down for good. And there's no more powerful or urgent argument for your support of Mother Jones' journalism right now than that. We need to raise about $450,000 to hit our online fundraising budget in these next few months, so please read more from Monika and pitch in if you can.

payment methods

REAL QUICK, REAL URGENT

Minority rule, corruption, disinformation, attacks on those who dare tell the truth: There is a direct line from what's happening in Russia and Ukraine to what's happening here at home. And that's what MoJo's Monika Bauerlein writes about in "Their Fight Is Our Fight" to unpack the information war we find ourselves in and share a few examples to show why the power of independent, reader-supported journalism is such a threat to authoritarians.

Corrupt leaders the world over can (and will) try to shut down the truth, but when the truth has millions of people on its side, you can't keep it down for good. And there's no more powerful or urgent argument for your support of Mother Jones' journalism right now than that. We need to raise about $450,000 to hit our online fundraising budget in these next few months, so please read more from Monika and pitch in if you can.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate