The hottest Unicorn cool money silly era is coming

2022-09-19
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Another Unicorn cool! The era of money and fools is coming to an end

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core tip: one star company after another suddenly fell! This story takes place in Wework, the largest shared office space in the world! Some time ago, Wework officially issued a statement that it would formally withdraw its prospectus to the U.S. Securities and Exchange Commission and postpone the IPO of the company

why did the agreed IPO suddenly terminate? Because in the face of falling again and again in the capital market, Wework is really unable to bear it

since embarking on the road of IPO, Wework's valuation has opened a big diving mode, with a straight-line reduction from the highest $47billion to $10billion to $15billion, down nearly two-thirds. The company's bond prices also fell again and again

after falling so much, investors represented by son Zhengyi will get angry. Listed at the current valuation, he will definitely lose everything. In particular, son Zhengyi's Softbank will lose more than 60%! Where would sun Zhengyi be willing to do such a loss trading? Therefore, under the pressure of the capital side, Wework had to stop its listing

of course,

what is sad is that it took only six weeks from the submission of the prospectus to the IPO, from 47billion to 10billion

fancy ppt pie

you always have to pay it back when you come out to mix. Wework's valuation burst because it turned out to be a foam

in fact, Wework is very similar to regs with office space, but the market value of regs listed in 2000 is less than 4billion pounds (about $4.9 billion). However, the highest valuation of Wework is $47billion, which is almost equivalent to 10 regs. So how did Wework raise its valuation for itself

Wework packaged itself with the hottest concept of "sharing economy" today. Just like Uber overturned the travel industry and airbnb overturned the accommodation industry, it claimed to overturn the traditional office industry, and became the "three giants of American sharing economy" side by side with the first two companies

in the primary market, ”Subversive "sharing economy" ", the valuation has always been very high. According to CB insights data, at the beginning of this year, Uber was valued at $72 billion and airbnb at $29.3 billion, so Wework's valuation of $47 billion is very reasonable?

What's more, Wework is not only simply sharing office space with others, but also providing services for the settled entrepreneurial teams and empowering them, which adds a tall concept.

but in essence, Wework is doing something A "second landlord" business, just like I love my family and freely rent the floating fiber on the surface of other people's housing materials to you after decoration. Wework rents other people's houses to transform them into office space and then rents them to start-ups.

in addition, Wework also dresses up "big data" for itself "The concept of" is known as empowering office space through data analysis, such as office site selection, office design, etc.

but in fact, the most common use of Wework's data analysis technology is to analyze daily trivial things such as how many meeting rooms, plugs, male and female sanitary rooms should be equipped.

after such a packaging, Wework's value naturally soared, exceeding its peers by ten times.

but Wework's cool ppt skills can fool investors in the primary market, but they can't fool the masses who can't see how to use the Xueliang tensile testing machine. Since Wework was ready to go public, countless Wall Street analysts and financial media have studied this "unicorn" star with magnifying glasses, and finally found that its "prototype" is actually a "poisonous horned beast"

why do entrepreneurial stars fall off the altar

in fact, in recent years, it is not just the shared office industry represented by Wework, ”Other star companies in the "sharing economy" field are also experiencing the same dilemma. For example, the share price of sharing travel giant Uber (Uber) has fallen by 35% since its listing, while the share price of LYFT has fallen by nearly 37%. The entrepreneurial stars who used to be very popular now have fallen off the altar. In summary, they often have several common problems:

1. Crazy expansion

in the final analysis, "sharing economy." "Most fields are conceptual innovations, lacking technical barriers, resulting in low entry barriers and many entrants. For example, Wework, which competes with industrial, serendipity and the wing, which specializes in women's offices in the North American market, etc.

under the fierce market competition, sharing economy enterprises represented by Wework tend to take the way of crazy expansion, horse racing and enclosure to seize the market, and do not hesitate to pay for it Ben, burn money wantonly

in terms of housing supply, in order to grab more real estate and rent more houses, Wework usually offers owners higher annual rent or longer lease term contracts. In terms of housing rental, in order to attract more entrepreneurs to rent, Wework has offered a more favorable price and a longer time for accounts payable

but the problem is that this will not only bring higher costs, but also greater risks. At present, 71% of the real estate contracts rented by Wework expire after 2024. Compared with the traditional office space Regus, only 37% of the contracts expire in 2024 and after

if the entrepreneur cannot pay Wework in time, Wework with cash flow shortage will not be able to pay the rent to the owner, and it will bear the consequences of the rupture of the capital chain

this is especially true in the period of economic downturn. The entrepreneurial risk is increasing and the project mortality rate is rising. For an enterprise that lives well today, the boss may run away tomorrow. Who will you ask for the rent then

2. Burn money wantonly

burn money, which has become a typical method of "sharing economy" star companies. Earn money from investors, but not users

behind Wework's seemingly high revenue growth, Yes "earn while lose" "The cruel reality. The data shows that the annual revenue in the first half of the year was $436million, $886million, $1821million and $1535million respectively; while its annual net loss reached $430million, $933million, $1927million and $904million respectively, with a cumulative loss of $4.2 billion in three and a half years, which almost wiped out the revenue.

the biggest expenditure is its dangerous mode of long-term lease, which apportions the lease cost for 10 to 15 years In the expenditure of each period. According to the data, Wework's annual space operating expenditure was US $430 million, US $810 million and US $1.5 billion respectively, accounting for 99%, 92% and 83% of the total revenue

in the radical expansion Road, the brutal money burning method has led to the company's deep loss and delayed profitability, which is a "common problem" of star companies in the sharing economy

brand awareness was further expanded. The Q2 financial report of sharing travel giant Uber in 2019 showed that its net loss reached US $5.236 billion (about 36.973 billion yuan), the largest loss since the official disclosure of financial data; LYFT's Q2 loss in 2019 reached $644million (about 4.547 billion yuan), compared with $179million in the same period last year. Didi, the domestic car Hailing leader, has never made a profit since its establishment in 2012, and it lost 10.9 billion yuan in 2018

3. Of course, the pot cannot be left on the entrepreneur alone. Without investors' courage and money, entrepreneurs dare not so recklessly expand and burn money

behind Wework is Softbank. Son Zhengyi probably made a lot of money from his investment in Alibaba. From then on, any technology enterprise is pleasing to the eye and feels like a value depression. When son Zhengyi met Adam Neumann, the founder of Wework, in 2017, he said that Wework was not "Crazy" enough, and its valuation could be worth "hundreds of billions of dollars"

when son Zhengyi officially invested 4.4 billion in Wework, he also told Adam Neumann to make Wework "10 times larger than the original plan"

isn't ofo in the field of shared bicycles the same

at that time, the founder of ofo, Dai Wei, originally intended to become a campus market steadily. After at least two years, the plate became stable and then entered the city. However, under the pressure of capital increase and liquidity requirements, Dai Wei himself also expanded, and began the crazy expansion of blindfolded rush. For this reason, he put in a large number of shoddy small yellow cars, resulting in "ten ofo, nine bad, and one bad to ride." It not only puts pressure on the cash flow of enterprises, but also brings "yellow garbage" all over the city

in fact, Pan Shiyi, chairman of SOHO China in China, has long discovered the truth. As early as the sharing economy was still hot in those years, he refused to finance his SOHO 3q and refused to come to the door to seek the acquired shared office enterprise

Lao Pan said such a remark, which was very precise: "the business of burning money is like picking up a bunch of flowers from the yard. Without roots, it will wilt after inserting them into the bottle for a period of time."

now it seems that veteran Lao pan is very prescient. Not only did Wework, the leader of the shared office industry, experience a moment of disillusionment, but its "Chinese disciples" also had a hard time. The development of domestic shared office giants Youke workshop and krypton space was also frustrated

the "Youke factory" founded by Mao Daqing, a former vice president of Vanke, experienced the disillusionment of the IPO dream. In February this year, it was reported that Youke factory hoped to be listed on NASDAQ this year, seeking a valuation of $3billion. However, in July, some media revealed that Youke factory would IPO in 2020, raising up to $200million

in addition, sharing krypton space, an office giant, is not only a distant IPO, but also a constant storm within the enterprise. Krypton space has completed a layoff before New Year's day this year, and then the company announced the cancellation of the annual meeting and year-end bonus. In addition, the news that "some properties cannot pay the rent on time", "corruption within the enterprise", "claims of HK $500million by Hong Kong Owners" also made krypton space in a deep quagmire

in the final analysis, this is not only a company problem, but also an industry problem, but also a business model problem

The failure of Wework's listing means that the investment market is undergoing a great change - the market has bid farewell to the blind rush era of many people, and those companies that "only burn money but not make money" are increasingly difficult to be recognized by investors

only when the tide recedes can we know who is swimming naked. It can be seen that Wework's fall is only the beginning. More and more unicorns will show the prototype of "poisonous horned beast", and more and more foam will usher in disillusionment

then, when the market finally returns to rationality, who will fall next

source l investor (id:touzijias)

author l Xiaoyue

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