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Re: WeeZuhl post# 348042

Sunday, 12/06/2020 8:51:36 AM

Sunday, December 06, 2020 8:51:36 AM

Post# of 401744

The transaction was handled through a private company





It is not a perfect analogy because WeWork is not (yet) publicly-traded, but the management tools employed by Adam Neumann as CEO of WeWork show some significant similarities to the tools used by Nasrat Hakim, including profligate spending of company resources on failed projects, without any internal controls. Neumann used private companies that he controlled to sell or lease assets to WeWork at inflated prices and then caused the company to repeatedly insist it was only paying him a "fair market price." Neumann used anonymous and obviously over-estimated company valuations in an attempt to snooker investors. Neumann used the overwhelming voting power of his preferred shares to dominate the board room and solidify his control.




https://www.inc.com/peter-cohan/how-adam-neumann-sold-softbank-on-weworks-profitless-prosperity.html


But investors saw through Neumann's reality distortion field. They rejected a grossly over-valued, cash burning commercial real estate leasing company and an overpaid CEO whose control of the company meant he could not be replaced by the board if the company's performance got worse.





This stuff matters. For years, Neumann was able to get away with what investors later referred to as "antics," but when it came time for the company to move to the next stage with their IPO, it all came crashing down, especially the fake valuation. It matters.


By the way, Neumann walked away with over a billion dollars, while thousands of employees were laid off. The company's future is highly questionable. It matters.




Occam's razor: the simplest solution is most likely the right one.

Hanlon's razor: never attribute to malice that which is adequately explained by stupidity.

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