WeWork Stands Before Us in All Its Naked Glory
The company’s IPO prospectus is an exercise in ducking reality. What happens to $47 billion of lease obligations if there’s a recession?
Fabulous garments.
Photographer: picture alliance/picture allianceThe Emperor’s New Clothes is a story about people refusing to acknowledge reality lest they lose standing at court. WeWork Cos Inc.’s prospectus for its initial public offering, published on Wednesday, is a similar tale.
The “hip” office space provider makes huge losses but its individual locations are somehow deemed profitable thanks to flattering accounting adjustments. While there was no mention this time of the company’s “community-adjusted Ebitda,” a much-maligned metric that boosted its profit shamelessly, it came up with an equally problematic “contribution margin” even though that positive figure excludes some hefty corporate operating expenses.