Wow what a huge rise and fall in the past few weeks! What I don't understand is how the S-1 filing ever saw the light of day? How could nobody reviewing that see any of the red flags that were obvious?
I think this just shows how hard it is to be objective when there are so many cultural/financial/etc influences affecting your judgement. Obviously their team bought the hype (and as a sad Browns fan I can totally sympathize with buying into hype then being disappointed!)
How could nobody reviewing that see any of the red flags that were obvious?
The Emperor's New Clothes is not just about rulers and their fashion choices. I've caught myself doing the same thing with much smaller investments that are rolling over tits up. I wanna believe, because the alternative is most unappealing ("You were wrong, Mr. Mikestew, and you are going to lose money on this. Most of it, in fact.") So I'm guessing when reviewing the S-1 when your financial testicles are lying on the block, you can easily skim right over the uncomfortable parts.
Of course, the rest of us with no financial stake, or other incentive to look at the S-1 with only one eye, look and ask, "WTF?"
or nobody wanted to rock the boat. If you had pointed out this as a legal grunt or rank & file finance guy, you would have looked bad for "ruining" the exec's payday. Better to let the market decide and just keep your head down and receive your pay check.
Especially if it turned out the market loved it. Then you're truly screwed. When you're working for a regular paycheck, better to be optimistic and wrong than pessimistic and wrong.
> In a frenzied effort to secure the roughly $100 million in fees for representing WeWork’s IPO, the world’s biggest banks had fallen over themselves to convince Neumann they understood the grandiosity of his vision.
The people in charge very clearly misread the market and thought they could unload that steaming pile of junk on the public markets. Everyone involved in this IPO knew how bad things were, they just hoped the market was hungry enough for "tech stocks" to paper over those issues.
Bystander effect, nobody speaks up because no one else has spoken up. Even if you have a feeling that something is a bad idea, you don't want to stick your neck out and have to defend your claim.
I think this just shows how hard it is to be objective when there are so many cultural/financial/etc influences affecting your judgement. Obviously their team bought the hype (and as a sad Browns fan I can totally sympathize with buying into hype then being disappointed!)