Wework’s fall back down to Earth was a long time coming
Sometimes only a bold and radical move can pull a company out of a hole, and by the standard of Wework, plans don’t get more radical than the ones announced by the company’s new chairman Marcelo Claure.
One can almost imagine the gasps as he informed staff that from now on, the business will “prioritise profit over growth”.
Profit? Where does such an old-fashioned concept fit into the world created by founders Adam Neumann and his wife Rebekah?
Now that Wework’s largest shareholder Softbank has taken full control of this eccentric company, the husband and wife team’s vision of a world in which Wework touched every part of life has been sidelined for a world in which the company stops burning through billions of dollars and starts making sense.
The first injection of reality came when Softbank’s private rescue deal gave the company a valuation of $8bn, a far cry from the $47bn figure that grew out of its plans for a public offering.
The listing idea fell from favour almost as soon as the prospectus was out. Reading that document, potential investors were greeted with the clause that if Mr Neumann died, a new leader would be handpicked by Mrs Neumann.
Given that she reportedly fired people if she “didn’t like their energy,” the governance arrangements looked unconventional at best.
In exchange for his shares and his board seat, Neumann will receive a cool $1.7bn, so he isn’t exactly going down in smoke.
However, roughly 4,000 Wework employees are set to lose their jobs as the new owners try to get a handle on costs.
It’s unlikely they’ll line the stairs to clap Neumann out of the building. Wework’s founders and cheerleaders might have slapped a philosophical veneer on top of things but this remains a company that leases buildings and then rents out desks in them.
They may yet become the best in the world at doing it, but their hype was unjustified and reality beckons.
Quite a splash
Sotheby’s last night raised a glass to another auction record being broken, this time for the highest price paid in auction for a single bottle of whisky.
The pricey scotch in question was the ‘Macallan 60-Year-Old 1926’ offered up for sale by an American collector and snapped up by someone else for £1.5m against a sale estimate of around £400,000.
It’s understood that the full collection also broke the record for any single-owner whisky auction at £7.6m.
No more Super Mario
Yesterday was the final press conference for European Central Bank (ECB) president Mario Draghi, the man who saved the Eurozone from disintegrating by uttering three little words: “whatever it takes.”
Delivered in his typically dry way, it was the moment investors realised that while economic conventions pointed to a collapsing monetary union, the EU would simply not let it happen.
Whatever it takes. Having saved the currency, Draghi is nevertheless leaving a stagnating Eurozone for Christine Lagarde to try and revive. She’ll have her work cut out, not least since the ECB’s strategy is to urge member states to loosen fiscal policy.
So, plenty of meetings in EU capitals coming up for Lagarde. She told an interviewer this week that she stays sharp at such gatherings by only pretending to drink the wine.
Given the state of discord at the ECB’s Governing Council, she may feel in need of a drink before long. Did Draghi have any advice for he? “No.” And with that, he was gone.
Put on a pedestal
On Edinburgh’s Royal Mile, near St Giles’ Cathedral, stands a 10-foot bronze statue of Adam Smith — one of the most important and influential philosophers the world has ever known.
The statue was unveiled in 2008 (232 years after The Wealth of Nations was published) and it was funded entirely by private donations.
Dr Eamonn Butler of the Adam Smith Institute was the driving force behind the project and he’s now on a new quest to honour another towering economist and political philosopher: F A Hayek.
Butler describes Hayek as “one of the leading twentieth-century thinkers on the free market” and plans to raise a statue near the London School of Economics, where Hayek taught.
Butler has engaged Tony Dyson, the architect behind the statues of Ghandi, Mandela and Millicent Fawcett in Parliament Square, and is now raising funds to start the consultation and planning stages.
To support this exciting and noble campaign, email hayek@adamsmith.org
Main image: Getty