TDS 03 - WeWork, India-Pakistan, Reducing cows' emissions, and other stuff

So it turns out that WeWork filed for an IPO. This is the first time that I’ve sat and read an S-1 document, and a few things in the “Material Risk Factors” section jumped out at me:

  1. “[we] had net losses of $0.4 billion, $0.9 billion and $1.9 billion for the years ended December 31, 2016, 2017 and 2018, respectively, and $0.7 billion and $0.9 billion for the six months ended June 30, 2018 and 2019” – no comments there, if you are a company consistently making losses, then the logical next step is to file for an IPO.
  2. “a significant majority of our locations under long-term leases that, with very limited exceptions, do not contain early termination provisions” – no comments there either
  3. “Our future success depends in large part on the continued service of Adam Neumann, our Co-Founder and Chief Executive Officer, which cannot be ensured or guaranteed.” – Wait. WHAT? You’re saying that the guy who led you into this morass of unprofitability is a flight risk?
  4. “Adam Neumann will control a majority of our voting stock upon the completion of this offering” – so he can GTFO at any time, AND he can still screw you over when it comes to voting at AGMs. Nice.
  5. But wait, not all is lost. WeWork says that it has a “committed revenue backlog” of $4 billion for the 2nd quarter of 2019. This means that, as at the end of Q2 2019, they have $4 billion of non-cancellable commitments made by people that have rented space from them, and WeWork will recognize that revenue at a future date. They haven’t disclosed when they’ll recognize the revenue, though.

Enough about WeWork. The yield curve has inverted! Business news channels have been screaming from the rooftops – a recession is coming! But which yield curve do you wanna look at? The one that inverted just now was the 2s10s (2yr, 10yr). The academic yardstick for a recession is the 3m10s (3month, 10yr), which inverted way back in May, while the 1s5s inverted in December! All this inversion may lead to one of two things – either it becomes a self-fulfilling prophecy and people slowly stop lending leading to a recession, or nothing happens because the inversion just reflects a temporary liquidity mismatch, and the banking system self-corrects it slowly. Whatever’s gonna happen will happen slowly, in all probability.


India and Pakistan are at it, as usual. Pakistan’s Independence Day is the same as India’s – 15th August. But because we (India) celebrate our Independence Day on the 15th, they (Pakistan), decided to celebrate theirs on the 14th. Now because my man Modi did some legal gymnastics and revoked (sorta) the Indian state of Jammu and Kashmir’s quasi-autonomy, Pakistan decided to commemorate the 15th of August as a “Black Day” (so kids, the next time you’re pissed at your parents, announce to them that you’re gonna celebrate your birthday one day before, and call your actual birthday a “black day”. That’ll show them.). And as usual, both neighbours shelled each other with their artillery all day and all night on the 14th and the 15th, and 3 Pakistani troops were killed, while no Indian losses were reported.


This week’s don’t-believe-this-study-at-all-because-of-basic-statistics award goes to a study claiming that a kind of seaweed reduces cow emissions by 99%. Why shouldn’t you believe the study? Because it was just one study, done on exactly 12 cows. And as we all remember from Stats 101, we need atleast 18 more of those in the study for the results to become even slightly believable. Once that’s done, we need to see the same result in several different studies, and that’s when we’re really on to something.


Hong Kong’s billionaires lost $15 billion in the stock market bloodbath that’s followed the protests. Li Ka-shing, that generous chap who likes to name university buildings after himself, has personally lost (on paper) around $3 billion of his net worth. Must be nice, to have so much money that you can lose $3b and still be a billionaire. Sigh.