A man named Adam Neumann used to be the boss of a big company called WeWork that lets people rent spaces to work in. The company had some money problems and needed someone new to help fix them. Now, there is a new boss named Anant Yardi who will try to make the company better by doing things like making it easier for small businesses to use their spaces and using cool technology. Adam Neumann still wants to be in charge of the company too but he might not get to. Read from source...
1. The headline is misleading and sensationalized. It implies that Anant Yardi is a no-drama successor to Adam Neumann, but it does not provide any evidence or examples of his no-drama approach. Instead, it creates an impression that he is a safe and stable choice for the company, which may not be entirely true.
2. The article fails to mention the role of John Sherwood, the judge of the New Jersey district bankruptcy court, in confirming the reorganization plan. This is a significant omission, as his decision affects the future of WeWork and its stakeholders.
3. The article focuses too much on Yardi's plans to expand WeWork's marketing to small businesses and incorporate hotel-like technologies. While these are relevant aspects, they do not address the core issues that led to WeWork's bankruptcy in the first place, such as poor financial management, excessive leverage, and a flawed business model.
4. The article quotes Yardi expressing confidence in WeWork's future without providing any supporting data or analysis. This creates a vague impression of optimism that may not be grounded in reality. It would have been more informative to include some metrics or benchmarks to evaluate the company's performance and prospects.
5. The article mentions Neumann's interest in regaining control of WeWork, but it does not explore why he lost it in the first place. It also does not examine the implications of his proposed bid for the company's future direction and governance structure. These are important questions that need to be addressed to understand the dynamics of power and accountability within WeWork.
Possible recommendation: Buy WE at current price (around $17) with a stop loss of $12, targeting $25 in the short term. The reasons for this recommendation are based on the following factors:
- The new CEO Anant Yardi is a seasoned real estate professional with extensive experience and a successful track record in the industry. He has taken over a company that has gone through significant restructuring and financial challenges, but he seems confident and determined to turn things around.
- The reorganization plan approved by the bankruptcy court eliminates $4 billion in debt and reduces rent liabilities by $12 billion, which significantly improves the company's financial position and reduces its risk of default or bankruptcy in the future. This plan also allows WeWork to focus on expanding its marketing to small businesses and incorporating new technologies that could enhance its competitive edge and customer appeal.
- The stock price of WE has been under pressure due to the pandemic, the company's bankruptcy, and the uncertainty surrounding its future. However, as the economy recovers and the demand for flexible office spaces increases, WeWork is well positioned to benefit from this trend and grow its revenues and profits. The recent vaccine developments also boost optimism and reduce the near-term risks associated with the pandemic.
- Based on these factors, WE presents an attractive investment opportunity with a significant upside potential in the short term, as long as it is bought below $17 and held with a stop loss of $12. The target price of $25 is based on a P/S ratio of 3, which is in line with the industry average and reflects the company's growth prospects and improvement in its financial situation.