WeWork: The Uber of Dumb Investments
Last week Fidelity and a few other investors pumped $400m into a private company called WeWork Companies Inc., valuing the whole company at around US$10bn. WeWork has been described as the, wait for it, Uber of shared office space. It takes medium and long term leases on office space in places like Manhattan, fits them out and then rents them to individuals, small organisations and geographically mobile workers on shorter term leases. All well and good. But for $10bn you can buy three or four Empire State Buildings. Or UK global leader Regus, Australia's world number two Servcorp, and still have billions to spare. Regus alone currently has 50 times as many offices as WeWork. And it's hard to see the network effects that you get with an Uber or Airbnb. This business might grow and be worth something, but the current valuation is absurd. Read more (VIEW LINK)
Steve began Forager Funds in 2009, and now manages approximately $470m across two funds. Offering a listed Australian Shares Fund (FOR) and an unlisted International Shares Fund, Steve focuses on long-term investing in undervalued companies.