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WeWork's First-Ever Bond Offering Is A Master Class In Financial Masturbation

It must be hard to compute "community adjusted Ebitda" with your head so far up your own ass.

No company has its head farther up its own ass than WeWork.


The real-estate arbitrage co-working startup that once erroneously claimed to be New York City's first $10 billion tech unicorn and has since decided to branch out into co-living spaces and education has decided that it wants to get some sugar from that sweet corporate bond market. So, like any normal company looking to raise money through debt, WeWork has released a bond offering document. But unlike any normal company, WeWork clearly lit a scented candle, dimmed the lights, put on some SZA and treated itself to a solid auto-fellatio session in advance of composing its first-ever debt offering.

In the offering documents, WeWork went to unusual lengths to show ways in which the company would be profitable. While many companies typically offer “adjusted” earnings, WeWork offered three different layers of adjustments.
It called the fully adjusted number “community adjusted Ebitda,” by which it subtracted not only interest, taxes, depreciation and amortization, but also basic expenses like marketing, general and administrative, and development and design costs. Those earnings, WeWork said, were $233 million.

Before we get to the rage-inducing Silicon Alley pile of thought horseshit that is "community adjusted Ebitda," let's first pause to remember that WeWork generated almost a billion dollars in revenue last year, yet somehow also managed to post losses of almost a billion. WeWork, like many of its "tech" mega-peers, is nowhere near profitable, but we almost respect them for trying to be instead of hewing to the old "Don't worry, we'll get there" narrative used by many huge startups that never get there.

That said, making up your own holistic, artisan, New Age Brooklyn accounting principle just to pretend that you're hemorrhaging less money than you really are? Well, that's actually super-ballsy and we'd almost respect it if WeWork wasn't trying to write down Kombucha on tap and losses associated with ping pong ball replacements. It's the height of Millennial hipster exceptionalism and it would truly make our skin crawl if, again, we didn't respect the balls-out ego involved here.

But we can only let WeWork get away with one of these, our patience is already wearing thin...Oh, who are we kidding? WeWork, you crazy...and you spend like it.

A Look at WeWork’s Books: Revenue Is Doubling but Losses Are Mounting [WSJ]



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