1. 1. No big surprises. Company's burn rate is phenomenal. SG&A increases in ~100% a year and net loss follows;
2. Revenues are $1.5B in 1H 2019 with ~$1.4B op. loss and $1B net loss;
3. location count increased 5x between 2016 and Q2 2019, from 111 locations in 34 cities in 2016 to 528 locations in 111 cities in Q2 2019;
4. Average company's lease length is 15 years and has lease obligations of $47.2B as of the end of Q2 2019.
5. Company offers class A with single vote right and keeps class B and C with 20 votes right.
6. Company claims a TAM of $1.7T goes up to $3T.
7. Company argues to reach breakeven in every location within 12 months.
For conclusion, I didn't see any big surprises in the S-1. To me the biggest problem with WeWork is the embedded duration gap between company's leases and tenants rents that could bring it down in an economic slowdown. I elaborated more on this risk in my blog post from 2 months ago: https://www.finrofca.com/news/wework-looks-weak-as-potential-ipo
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
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