WeWork Going Public

Hi friends,

It has been IPO season lately, and another highly anticipated IPO is expected to hit the market soon – WeWork.

WeWork is looking to revolutionize the office renting space, and essentially subrents to a number of different people in a shared office sort of way. This model allows for a discount on the actual office space due to its size, and turns around and offers flexibility and options to those looking to rent space.

In the space rental industry, you are often locked into long term leases that can be devastating if your business struggles to meet expectations or has financial constraints. Not to mention, if you are small or a single person looking for an office, what truly makes sense for that person.

WeWork fills the mold well, in my opinion, and is the future of office leasing. I have been in a couple of their spaces (though have never rented myself) and found them to be upscale, modern and convenient. They have many amenities that you would find in an office space, such as a coffee/snack area, and areas to sit and lounge for a bit for a break.

Rent will vary from area to area, but if you are looking for a space to get out of the house and go to work, a spot at WeWork makes a lot of sense and comes with great flexibility – I see it as a great value.

As far as an investment goes, it seems to be similar to many of the other IPOs lately – they have raised many financing rounds with private equity and venture capital groups, so there are a number of people who are looking to cash out in the IPO, which will put selling pressure on the stock. I like the model, but the latest financing round put the company worth over $47 billion, which is already a highly valued company – whether they can increase their company’s value after going public will largely depend on mass adoption from the public (I think that is likely) and future profitability (need to review their financial history and forecasting models once they are public).

This will be an interesting company to keep an eye on.

What are your thoughts on WeWork – both as a business model and as an investment?

Take care,

Brian

Note: Image source is WeWork.com