WeWork managed to pull the wool over the eyes of investors for too long. It was plain as day follows night that they were not a tech company but an office rental firm, just another short term flexible office rental firm, perhaps with a slight USP of the appeal to high tech start-ups and the geeky feel they tried to foster at their sites. Not a rising tech star with daft forward earning multiples based on exponneital growth.
So how did they do it?
They created a cult following around their leader causing others to rush in and hand over their money, which is textbook stuff for cults. The leader is nicely enriched and the donors are left penniless. Well, not quite in this case, as SoftFund was alomost certainly complicit in the plot to ramp and run with the failed IPO. Not sure about the Saudi money but I won't shed a tear for them.
At least nobody on the high street lost out but it beggars belief how the founder can pocket so much out failure while his staff are left nervously contemplating their futures, if the have not already been given the chop. Capitalism is supposed to reward risk not enrich following failure.
It is headlines like this that gives capitalism a bad name and foster popular resentment that spills over into our political system. I have no problem with mania pushing up a price which then bubbles and bursts , nor does business risk that causes investors to lose give me a sleepness night. That is the nature of the beast.