People Are Worried About We

I have argued before that the We Co., formerly WeWork Co., is a clever financial engineering company that has managed to tell an appealing fast-growing-tech-company story to equity investors while also telling an appealing stable-real-estate-company story to lenders, but I must say that I am stumped by this:

Uh, no, first of all, that is not the way it works: Equity investors and lenders want different things; Wells Fargo just wants to get its money back, while the people buying the IPO will want a story about explosive growth and expanding margins. But second, Wells Fargo didn’t exactly get comfortable with WeWork: “Under the terms of the financing, banks will have to make good on their commitments only if the initial public offering raises at least $3 billion.” The banks’ comfort is conditional on the equity investors getting comfortable. You can’t tell the equity investors “you should be comfortable with this offering because Wells Fargo is comfortable with it conditional on you being comfortable with it.” Someone has to get unconditionally comfortable!