From the New York website: Barry Sternlicht doesn’t understand why people invest in WeWork at its current, $16 billion valuation. “Why would you go to to WeWorks (sic) at 300 times EBITDA. If you got shares that are at zero value, like realty cash and incredible compensation,” he said Tuesday, according to a transcript. “When these things go down they do not go from 16 to 14, they go from 16 to 2. There is no elevator down, you hit the floor.”
WeWork, the New York-based co-working company, reached a $16 billion valuation with its latest funding round in March and has raised around $1.4 billion from investors to date. Real estate bigwigs Mort Zuckerman and Bill Rudin are among the firm’s backers. But although the company is profitable, it is making less money than initially hoped.
According to leaked documents, the company in April lowered its 2016 profit projection to $14 million from $65 million, and its revenue projection by 14 percent to $532 million from $620 million.
Speaking at the Delivering Alpha conference in New York, Sternlicht also said he would short Elon Musk’s electric car company Tesla and threw shade on Silicon Valley’s investment culture. “We want to know how does the company eventually make money and where’s the business model and that is still something you don’t talk about in Silicon Valley that much,” he said. “Pinterest $12 billion, I use it but I don’t pay anyone anything for it so it seems like a lot of money for a bulletin board, but that was the market cap of Starwood Hotels when we owned $1.6 billion we made $1.6 billion and we were told buy no market cap that year so it was like ‘wow, that’s a lot of…believing.” [CNBC] — Konrad Putzier