WeWork’s released its highly-anticipated IPO prospectus last week. The numbers behind the office-management company puzzled an analyst that specializing in valuing private companies aiming to go public.
Rett Wallace, the chief executive officer of Triton Research, told Bloomberg that WeWork’s filing doesn’t include enough financial information to build an accurate model for its business.
“The prospectus is a masterpiece of…
obfuscation,” Wallace told Bloomberg in an interview. “If the underlying facts were positive, why would a company go to so much trouble to prevent you from understanding them?”
WeWork bleeds massive amounts of cash — $1.3 billion in the first-half of 2019 alone — and the economics of its business have been under a microscope since its prospectus was released.
Triton uses what it calls an “obfuscation index” to assess technology IPOs. In past, the firm has used the rating to help forecast the success of tech IPOs, and since January 2018, companies with above-average score have soared 92% from their offering prices, Bloomberg reported.
Triton found high-levels of obfuscation in WeWork’s filing, according to Bloomberg. Triton pointed out how the company stops recording marketing and sales expenses at WeWork locations once they’ve been open for two years even though the expenses don’t actually stop.
Wallace also told Bloomberg that the shortage of information in the filing is even more glaring when its compared to IPO documents from other companies.
Here are some other WeWork stories from the team this week..
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