We Work was symptomatic of venture capital funded companies that tiptoed to the public markets with no profits to feed the beast.
In the case of We Work, the market finally woke up and said, “Hey, you don’t even have a plan to become profitable. Get outta here.”
We Work was further punished for the behavior of its leader, the inimitable Adam Neumann, who was treated to a hubris-crushing cure that resulted in his departure (though anybody who gets bought out with a more than a billion dollar send off will get no sympathy in the Big Red Car’s book, sorry).
What has now taken root is the quaint notion that companies — even before going to the beauty parlor to get primped for an IPO — are going to have to be within earshot of being profitable.
Hail, Uber! Uber went public last week with great fanfare befitting the third largest Initial Public Offering in US history. Hoorah, Uber! All hail Uber!
Then, they ran into reality and reality drowned them with surge pricing.
Uber came public at the low end of the proposed range (already a huge disappointment when compared to the investment bank courtship days) and promptly fell, making it the largest first day IPO loser in US history. Hello, America.
In fairness to Uber, the markets have been reeling with the US-China trade treaty negotiation news and the imposition of tariffs and retaliatory tariffs. [Trump’s fault?]
Lyft — a competitor — was also tanking adding to the cloud over the market and the IPO world.
Nonetheless, Uber has some problems.
Big Red Car here. Ahhh, back to the great times in the ATX, y’all. I know you’re jealous. Who wouldn’t be?
Going to be 76F today. Ahhh, on Earth as it is in Texas! The ATX.
So The Boss was talking with one of his brilliant CEOs who took his advice and bought an Old Economy company and transformed it into a New Economy company. Oil Patch company. Continue reading