Ricofoley Posted August 20, 2019 Share Posted August 20, 2019 Imagine investing in this: Quote Similarly, MKM Partners’ Rohit Kulkarni said in a note Friday that investors would “have to take a big leap of faith in order to believe that WeWork would show signs of a sustainable economic model” given the rising costs across its 528 locations. He said WeWork could soon find itself strapped for cash. “At an estimated $1500-200mn in cash burn per month, we believe the company has about six months in execution runway ahead before facing a cash crunch,” Kulkarni wrote in a research note. Quote After WeWork rebranded to become The We Company in April, it adopted a complicated corporate structure, called an umbrella partnership corporation, or Up-C. In effect, this turned WeWork into a limited liability company, with The We Company overseeing it and joint ventures in Asia, as well as other related entities, such as its fund ARK Capital Advisors, which oversees global real estate management and acquisitions. (The acronym stands for Adam, Rebekah and Kids, in reference to his wife -- who’s listed as a co-founder and wields significant influence at the company -- and their five children.) The Up-C structure has tax benefits for Neumann and other executives, as they’ll be able to pay tax on any profits at an individual income-tax rate, according to the Financial Times. Meanwhile, public shareholders will be subject to double taxation, since the holding company will be taxed on income and investors will pay another tax on dividends. https://www.cnbc.com/2019/08/17/wework-ipo-filing-strangest-and-most-alarming-things.html Here's another, similarly bewildered take: https://www.theverge.com/2019/8/15/20806366/we-company-wework-ipo-adam-neumann Quote Link to comment Share on other sites More sharing options...
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