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WeWork reveals losses as it struggles
to elevate IPO consciousness
ICCA board in Tel
Aviv following $100m
Eurovision renovation
The board of the International
Congress and Convention
Association (ICCA) recently
visited Tel Aviv to meet key
Israeli industry figures.
The three-day trip was
organised by the Tel Aviv
Convention Bureau and the
Israel Ministry of Tourism and
enabled ICCA Board members to
meet Amir Halevy, CEO of Israel
Ministry of Tourism; Eytan
Schwartz, CEO of Tel Aviv
Global & Tourism; Tamir Dayan,
CEO of Expo Tel Aviv, as well as
ICCA members from Israel.
The delegation also visited key
locations and venues around the
city, including Expo Tel Aviv
which hosts hundreds of
conferences annually, and =
recently the Eurovision Song
Contest, which turned into the
largest international event in the
history of the city. It took place
in Expo’s Pavilion 2, which had
undergone a US$100m
renovation.
James Rees, ICCA President
said: “Tel Aviv has it all;
amazing history, a thriving
innovation scene and a
cosmopolitan feel. The story of
this destination will surely
capture the heart of each and
every visitor”.
8 /
CONFERENCE & MEETINGS WORLD
WeWork, the international flexible
office provider, has revealed large
losses as it attempts to float on the
stock market.
Its co-working space provider
parent holding, We Company,
announced the financial news on
14 August. It was news that has
been met with a storm of criticism,
most notably on Twitter.
Releasing its financial
information ahead of an IPO,
WeWork reported a US$1.9bn
pre-tax loss for in 2018, up from a
$939m loss in 2017 and of $430m
in 2016. 2019 is also in the red to
the tune of $900m for the first six
months.
WeWork provides working
spaces, with rental agreements
available for as short as one month.
The brand has built a hipster
reputation with games rooms and
free beer and coffee. As distinct
from IWG’s Regus brand or etc.
venues, however, the spaces do not
offer much privacy and few doors
in their open plan layouts.
Analysts have suggested the
company is looking to raise at least
$3bn although has not, at time of
writing, said where it is intending
to list.
The WeWork IPO prospectus
was widely mocked on social
media, notably for some anodyne
and New Age musings and
straplines, including on the cover
page of its prospectus: ‘We
dedicated this to the energy of We
– greater than any one of us but
inside each of us.’
The document also informs
potential shareholders WeWork’s
“mission is to elevate the world’s
consciousness”.
It was also revealed that there
are minimum future lease
obligations of $47bn over the next
15 years.
The London Financial Times
commented: “Over the past
three-and-a-half years,
Wednesday’s SEC filing reveals,
WeWork made a total of $20.9m
in lease payments to four
properties in which [CEO] Adam
Neumann has an interest,
receiving $11.6m back in ‘tenant
improvement reimbursements’ last
year. Barring future discounts, it is
still on the hook for almost
another $237m in payments over
the life of the leases.”
The company has moved to
unpick this financial relationship
with its CEO and said Neumann
would sell his properties to a new
entity called ARK, with ARK
covering the costs Neumann
incurred in buying the four
properties.
A selection of comments posted on Twitter
following announcement from WeWork included:
‘I think my favourite
WeWork thing is that it
rents buildings owned by the
CEO, who bought the
buildings by borrowing
against WeWork stock.
Nobody seems to be
questioning why this is
okay…’
San Francisco-based technology
expert
Laurie Voss
/
ISSUE 102
‘WeWork’s IPO filing will
be a key test of investor
appetite for fast-growing,
money-losing start-ups’
Reuters
‘WeWork’s all-male Board is
pretty typical of IPOs these
days’
Bloomberg
‘Based on the reporting about
its IPO, @WeWork is basically
just a commercial property
management company that also
includes some Enron-like legal
structures and self-dealing
transactions and Marianne
Williamson-like self-help
branding. Do I have that right?
Disruption! Synergy!
Graham Steele, US financial
regulation expert