As WeWork’s IPO nears, is the co. overvalued or undervalued?

In social terms, WeWork — recently renamed the We Company — is one of the modern world’s least controversial high-flying private startups.

Centered on the idea of providing flexible workspaces to individuals and small groups, the company has none of the myriad regulatory issues afflicting an Uber or an Airbnb. But purely considered as an investment case, WeWork is arguably the most controversial player in the world today.

The Wall Street Journal dubbed it…

“A $20 Billion Startup Fueled By Silicon Valley Pixie Dust” in 2017, outlining the thesis that a boring, unprofitable real estate company has managed to achieve the pricey valuation of a tech company. About a year later, the Financial Times took another stab at the story, concluding “WeWork Does Not Deserve a $20 Billion Price Tag.”

But rather than listen to the best minds in mainstream journalism, SoftBank, the controversial Japanese company that’s transforming Silicon Valley with its big Saudi-backed checkbook, poured in more money and lifted WeWork to a staggering $47 billion valuation.

In late April, WeWork filed papers stating its intention to be the latest in a string of big, money-losing companies to go public.

Several recent IPOs, meanwhile, have turned disappointing, with Lyft, Uber, and Pinterest all seeing share prices drop in the immediate aftermath of IPOs. To supporters, the fact that We has kept growing rapidly in the face of years’ worth of media disdain is just another sign that the media is paranoid about bubbles and dismissive of the extent to which huge swaths of the economy remain open for disruption. To critics, We is just the biggest sign that the current state of startup valuations is driven by shady accounting gimmicks and hype over substance.

Why customers like WeWork

A critical theme about WeWork is that it’s not “really” a technology company, which is mostly true, but it’s certainly a company whose business is boosted by big technological trends…

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