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Home / Business / WeWork has losses in the first quarter and says investors should consider losses as investments

WeWork has losses in the first quarter and says investors should consider losses as investments



Adam Neumann, co-founder and CEO of WeWork.

Michael Nagle | Bloomberg | Getty Images

Uber and Lyft stumbled out of the gate as newly quoted companies represented the sharing economy. WeWork tries to prepare a different story for Wall Street.

In an interview with CNBC to discuss the company's financial data, Arto Minson CFO called on investors to consider losses as "investments".

"We really want to emphasize the difference between losing money and investing in money," Minson said Wednesday. "You can lose money or you can invest money, and at the end of this quarter, we have these cash-flow generating assets." It lost $ 264 million over the period, reducing its deficit from the same period last year, when it lost $ 274 million. Meanwhile, sales doubled to $ 728.3 million (including $ 39 million from a program called the Creator Awards) as the company expanded into new international markets and consolidated membership for its co-working spaces.

Wall Street may need to be convinced before the flotation WeWork filed confidentially in December. Public market investors have punished Uber and Lyft for their billions in losses and the uncertain path to profitability. Uber sold stocks at the lower end of its expected range last week and the stock is still well below its debut price.

When asked if he wanted to differentiate WeWork's losses from capital, the companies traveling on subsidies and rebates, Minson said, "that's a fair differentiator." Hiring workplaces is "a proven business model," he said. The number of members increased from 220,000 the year before to 466,000.

WeWorks model continues to rely on substantial private-sector funding, namely SoftBank, which has invested more than $ 1

0 billion in the company, including $ 2 billion this year at $ 47 billion , WeWork has to put money into real estate in some of the most expensive markets and earns money back over time when companies and individuals pay their rent or membership so pay a high price. When Uber went public, it was only the fourth US company with a market capitalization of at least $ 50 billion that lost money the previous year. The other three were CVS, General Electric and Qualcomm (the chipmaker had only one loss because of a one-time burden due to a change in the tax code).

Last year, WeWork lost $ 1.9 billion, exceeding Uber's losses. with a turnover of 1.8 billion US dollars. Cash and cash equivalents were $ 5.9 billion at 31 March, compared to $ 6.6 billion at the end of December.

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