|Bid||164.20 x 0|
|Ask||164.70 x 0|
|Day's range||163.30 - 172.40|
|52-week range||101.15 - 470.40|
|Beta (5Y monthly)||1.07|
|PE ratio (TTM)||3.31|
|Forward dividend & yield||0.07 (4.29%)|
|Ex-dividend date||23 Apr 2020|
|1y target est||N/A|
Legendary stock trader Paul Tudor Jones once said: “At the end of the day, the most important thing is how good are you at risk control.quot; Yet it is all to8230;
These two stocks are heading in two different directions and I would only buy one of them today.The post £1k to invest? I'd buy this double-your-money FTSE 250 growth stock appeared first on The Motley Fool UK.
WeWork's decision to abandon its initial public offering and the resulting turmoil at the shared office space provider has created an opportunity for major competitor IWG , said IWG's founder and Chief Executive Mark Dixon. This contrasts with the large losses reported by WeWork in its filings for the IPO, which also triggered questions about whether its business model worked.
(Bloomberg) -- As WeWork contemplates listing on the public markets at a far lower valuation that previously expected, its biggest backer—Japan's SoftBank Group Corp.—is bracing for a potentially staggering loss, a stark reminder of the risks of an investing strategy that inflated startup valuations across Silicon Valley.SoftBank has a roughly 29% stake in the We Co., WeWork’s parent, said one executive at an analyst call on Wednesday, after the company plowed a total of $10.65 billion into the startup. The Tokyo conglomerate’s massive stake is a vote of confidence in the unprofitable company, which lost about $1.61 billion last year.Perhaps more than any other startup, WeWork has come to symbolize the brash investment style of SoftBank and its $100 billion Vision Fund, known for making huge bets on promising but unproven companies, and spurring others in the industry to follow suit to compete. The success or failure of WeWork’s initial public offering is likely to be read as a statement on the overall standing of SoftBank, the judgment of its executives and its ability to raise cash for future ventures.Now, SoftBank’s big bet may already be turning sour as WeWork mulls an IPO that would peg its worth at less than half its $47 billion valuation when SoftBank invested earlier this year. The New York-based company is now said to be considering a market debut at just $20 to $30 billion, fueling tensions among SoftBank employees. The WeWork IPO comes at a critical time for SoftBank, which is currently trying to convince investors to bankroll a second $108 billion iteration of its Vision Fund. The company is already mopping up the fallout from another poorly performing IPO. SoftBank put $7.7 billion into Uber, whose market value promptly fell after shares listed publicly at $45 in May. That price has since fallen to about $35, well below the price SoftBank paid for part of its stake. Some staffers at the Vision Fund are now concerned that WeWork’s valuation could fall further, to even below $20 billion—the valuation of SoftBank’s original investment made by the Vision Fund, according to people familiar with the company who asked not to be identified discussing private matters. Because the Vision Fund is so exposed to WeWork, it will play a substantial role in compensation for employees of the fund. People at the Vision Fund are not paid on a deal-by-deal basis, as with some other venture firms. Vision Fund employees, including high-profile bankers and investors, receive base salaries and bonuses, but only get payouts when profits are booked. They are also on the hook for potential losses, facing clawbacks of 20% and above for some senior staff, and 7% for more junior employees. There is also a possibility that WeWork could delay its IPO. Adam Neumann, WeWork’s larger-than-life chief executive officer and co-founder, pledged to SoftBank CEO Masayoshi Son earlier this year that WeWork will have a valuation of no lower than $47 billion when it goes public, people familiar with the matter said. A SoftBank spokeswoman declined to comment for this story. Neumann also met with Son in Tokyo last week to discuss a potential capital infusion, the Wall Street Journal reported, citing unidentified people familiar with the matter. The possibility of SoftBank investing money to enable WeWork to delay the IPO until 2020 was also raised in the discussions, the paper said.SoftBank’s massive bet in WeWork is emblematic of Son’s overall approach. “Why don’t we go big bang?” he told Bloomberg in an interview last year when asked about his investing style, and added that other venture capitalists tend to think too small. His goal of swaying the course of history by backing potentially world-changing companies requires that those companies make large outlays in areas from customer acquisition to hiring talent to research and development, a spending tactic that he acknowledged sometimes brings him into conflict with other investors.“The other shareholders, they try to create clean, polished little companies,” Son said. “And I say: ‘Let’s go rough. We don’t need to polish. We don’t need efficiency right now. Let’s make a big fight. Let’s make a big, successful—a big win.’”Sometimes, though, the other investors he comes in conflict with are his own. The Vision Fund’s backers, particularly Saudi Arabia’s Public Investment Fund and Abu Dhabi's Mubadala Investment Co., scuttled a $16 billion investment early this year in WeWork that Son had championed, something Son alluded to in an interview with CNBC in March. SoftBank ended up making only a $2 billion investment separately from the Vision Fund.SoftBank’s huge bet on WeWork has also caused friction between members of the Tokyo company itself. While Son has the final say on investments, WeWork is seen internally as the bet of Ron Fisher, the Boston-based SoftBank executive and a longtime aide to Son, the people said. Fisher, who grew up in South Africa, was SoftBank’s highest-paid executive with $31 million in compensation in the last fiscal year, 62% more than a year earlier. Before SoftBank first invested in WeWork in 2017, Fisher met with executives at IWG Plc, a European competitor with a much lower valuation and—at the time—10 times as many sites, people with direct knowledge of the matter said. Some Vision Fund employees were surprised when instead of convincing Fisher not to invest in WeWork, the unfavorable metrics seemed to encourage him, leaving him convinced that tremendous growth lay ahead for the fledgling company. Son agreed. A month later, the Vision Fund led a $4.4 billion investment round into WeWork at a $20 billion valuation. Fisher and Mark Schwartz, the former Asia Pacific chairman at Goldman Sachs Group Inc. who was appointed to SoftBank’s board that year, joined WeWork’s board. WeWork, by far the largest in the grouping of SoftBank's real estate investments, serves as the linchpin of Son’s broader strategy around real estate. In all the sectors where SoftBank makes big bets, including financial services, transportation, health, and others, it believes that too many small companies with outdated technology drag down the industry, creating opportunities for bigger, updated iterations. SoftBank has also backed startups like brokerage-services provider Compass, mortgage lender Social Finance Inc. and construction-tech firm Katerra Inc., with the belief that these companies could funnel business to each other and boost growth in the sector overall.But Fisher and Son’s plans weren’t wholeheartedly shared by investors in the Vision Fund. That’s part of the reason that SoftBank’s WeWork stake is split between SoftBank itself and its giant tech fund. Of SoftBank’s 114 million WeWork shares, about 64 million are owned by the Vision Fund, and the rest by SoftBank Group, according to financial filings. Once SoftBank completes a contract that will result in it buying more shares next year, SoftBank Group’s stake will increase to roughly the same as the Vision Fund’s, the filings said. A spokeswoman for SoftBank declined to comment on the reasons behind splitting the stake.In its results for the quarter ended in June, SoftBank said the Vision Fund’s fair value was $82.2 billion. The cost of the investments in the most recent results was $66.3 billion, up from $60.1 billion the prior quarter, and the fair value doesn’t reflect the Vision Fund’s handful of exited investments such as the 146.68 billion yen the Vision Fund made when it sold its stake in the Indian retailer Flipkart to Walmart last year. For the most part, the fair value includes the portfolio companies that have held IPOs, because the Vision Fund typically holds onto most of its shares rather than selling them in the IPO, as was the case with Uber. That means as the price of those listed shares declines, the drop will hit the Vision Fund’s fair value in the next reported results. The Vision Fund will be able to book some increases due to successes like Guardant Health, a portfolio company that listed last year with a steadily rising stock price, but that still falls far short of offsetting the expected declines in other holdings. Similarly, any decline in that valuation at WeWork’s listing will hit the Vision Fund’s fair value. Son, a famously long-term thinker who has outlined 30- and 300-year plans for humanity, could conceivably brush off a poor showing for WeWork as a bump along the long road toward changing the world. It's not clear the Vision Fund will be able to do the same.To contact the authors of this story: Giles Turner in London at firstname.lastname@example.orgSarah McBride in San Francisco at email@example.comTo contact the editor responsible for this story: Anne VanderMey at firstname.lastname@example.org, Mark MilianTom GilesFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg Opinion) -- The 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.Meanwhile, WeWork’s description of Adam Neumann, its co-founder and chief executive, stops short of claiming he can walk on water, but only just: “Adam is a unique leader who has proven he can simultaneously wear the hats of visionary, operator and innovator, while thriving as a community and culture creator,” it says. That’s a lot of headgear.Just because Masayoshi Son’s SoftBank entities and other backers believe this company is worth at least $47 billion (or perhaps twice that if the targets of a recent stock incentive plan are any guide) doesn’t just make it so. The reality is that that WeWork operates in a cyclical sector with few barriers to new competitors, and it remains both a corporate governance nightmare and a cash bonfire. Its main listed rival, the U.K.’s IWG Plc, is capitalized at just 3.75 billion pounds ($4.4 billion). And that’s despite it generating more revenue than WeWork and making a profit.Prospective WeWork investors should channel the spirit of the child in Hans Christian Andersen’s tale and point out that its fabulous garments aren’t all they’re cracked up to be. Neumann’s grip on the company is equally troubling as he’ll still control most of the voting rights after the listing. That gives him the power to remove directors and executives who displease him and, of course, to dictate strategy. It’s an unequal relationship too. Despite his apparent importance he doesn’t have an employment contract, meaning he could leave at any time in theory.Various eye-opening “related-party” transactions (in this case, WeWork taking out leases on buildings owned by Neumann) are declared, as my colleague Shira Ovide points out. Meanwhile, three of the banks underwriting the IPO have extended Neumann a $500 million credit line secured against his shares. If he were ever unable to satisfy a margin call, the lenders could seize and sell stock, the prospectus notes, putting downward pressure on the share price. In other words, the interests of Neumann and other investors aren’t necessarily aligned.But how can one put a value on the shares anyway? The company doesn’t plan on paying dividends, which is hardly surprising in view of the $2.5 billion of cash it burned through in the first six months of this year. And you can’t easily apply a multiple of earnings to estimate its value because WeWork doesn’t have any of those either – and won’t do for the foreseeable future.Net losses, which totaled $1.6 billion in 2018, “may increase as a percentage of revenue in the near term and will continue to grow on an absolute basis,” the company said, ominously. This all matters because WeWork has a growing pile of debt and $47 billion of mostly long-term lease obligations. Unlike a WeWork membership, those leases can’t be cancelled easily. Revenue that’s been committed covers less than one-tenth of that total obligation. Doubtless aware that this huge financial commitment on leases is perhaps one of the biggest flaws in its investment case, WeWork dedicated a part of the prospectus to explaining why it should still be okay even if there’s a recession. It’s plausible that during an economic downturn some businesses will want to use the cheap, flexible office space that WeWork provides. Equally plausible, though, is that companies will go bust or no longer need as much space. Enterprise customers – big firms that use external office space for staffing overspill – might also chose to bring more of their employees back in-house, notes the Fitch ratings agency.With bond markets indicating that a recession may well be on the horizon, one wonders why investors are being asked to take a punt on WeWork before we really know how the firm would cope. What’s the rush?Earlier this year SoftBank’s Vision Fund was reported to have passed up the chance to pour even more money into WeWork. Public market investors should ask themselves if and why they’re being invited to fill the gap.In fairness, WeWork has an impressive brand and its membership has doubled every year since 2014. But that growth has been enabled by unlimited supplies of capital and not having to worry about the bottom line. Warren Buffett mused famously that you only discover who’s swimming naked when the tide goes out. WeWork investors might be about to find out.To contact the author of this story: Chris Bryant at email@example.comTo contact the editor responsible for this story: James Boxell at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Chris Bryant is a Bloomberg Opinion columnist covering industrial companies. He previously worked for the Financial Times.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Here's What to Know about WeWork before Its Expected IPO(Continued from Prior Part)IWGGlobally, IWG, the parent of Regus, is WeWork’s biggest competitor, with 2,600 office spaces around the world. Although IWG has traditionally offered managed
The number of serviced and co-working offices across Europe has ballooned by more than 200 percent in the last five years, according to a report by real estate broker Colliers International Group Inc. WeWork has helped to drive this growth: it has nearly 50 locations in London and has added sites from Manchester to Moscow. “The IPO is a great milestone in the evolution of the flexible work-space scene,” said Tom Sleigh, head of consultancy on the industry at Colliers. While WeWork initially rose with the advent of the gig economy and an explosion of startups, big companies are increasingly seeking more flexible offices, too.
The company behind the Regus and Spaces brand said its quarterly performance was in line with expectations and new 2018 and 2019 location openings were developing according to plan. IWG has been looking to close or refurbish locations in the UK and some other markets to revive its business, which has been hit by a weak property market in London and higher costs. IWG said it expects capital expenditure of about 230 million pounds for 2019 and plans to add 6 million square feet of new space this year.