🍋 We(So)Back

Adam Neumann wants to buy the now-bankrupt WeWork back, plus JPMorgan trying some old-school growth strategies, and Disney activist investor struggle.

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Short Squeez
February 07, 2024

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“If you are open-minded and you let the universe come in, you never know where things might go.” — Adam Neumann

Good Morning! JPMorgan is trying out some old-school growth strategies like building bricks-and-mortar branches. Meanwhile, Disney’s feud with its activist investor Nelson Peltz is heating up. The University of Kansas is launching an economics class focused on Taylor Swift. And Super Bowl advertisers are sticking to the script and playing it safe. Plus Bill Ackman’s top 9 investing reads, and how to use the 60% calendar rule to manage your time.

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SQUEEZ OF THE DAY

We(So)Back

Adam Neumann wants to buy WeWork back, the now-bankrupt coworking company he founded.

WeWork was the poster child for unprofitable startups in the low-interest rate era. And Adam Neumann built the company by schmoozing and taking tequila shots with VCs, ultimately raising $13 billion and propelling WeWork to a $47 billion valuation.

But while Neumann was pitching investors to think of WeWork as a disruptive tech company, it was bleeding cash left and right. Ultimately, WeWork’s 2019 IPO flopped.

Neumann got pushed out for practically making sh-t up (community-adjusted EBITDA, anyone?) and, after getting caught hotboxing on the company’s private jet, he got one of the largest severance packages of all time at $1.7 billion.

WeWork has struggled since the pandemic (you can find our full breakdown here) and filed for bankruptcy last November.

Neumann is now looking to team up with Dan Loeb’s hedge fund Third Point to purchase WeWork out of bankruptcy. WeWork is not being very cooperative though, adding to broader frustrations from creditors and landlords about the slow progress in WeWork's revival since its bankruptcy filing.

Takeaway: If Neumann can successfully buy WeWork back, it would be a hilarious turn of the tables. Many of WeWork’s investors still blame Neumann for running the company into the ground - and the optics of his $1.7 billion severance package from a now-bankrupt company don’t look great, either. But on the other hand, it could be Neumann’s last shot at rebuilding WeWork into his original vision. In any case, this is going to be one helluva movie when all is said and done.

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HEADLINES

Top Reads

  • JPMorgan is growing the old-fashioned way (WSJ)

  • ESPN, Fox, and Warner Bros. launch joint sports streaming platform (CNBC)

  • Super Bowl advertisers are playing it safe (NYT)

  • Spotify rebounds after cost-cutting (YF)

  • The Taylor Swift Economy is now a high school curriculum (Axios)

  • Does the music industry need TikTok? (BB)

  • Asset managers bet on infrastructure investment shops (WSJ)

  • Credit card delinquencies surged in 2023 (CNBC)

  • Disney's feud with activist Nelson Peltz is heating up (YF)

  • Traders betting on Tesla rebound pile into leveraged ETF options (YF) 

CAPITAL PULSE

Markets Rundown

Stocks closed higher after an earnings surge.

Movers & Shakers

  • (+) Palantir ($PLTR) +30% after the software company reported a revenue beat, and strong demand for AI.

  • (+) Coherent ($COHR) +17% because the semiconductor company beat top and bottom line estimates.

  • (–) Docusign ($DOCU) -2% because of layoffs, stalling deal talks with private equity firm.

Private Dealmaking

  • Novartis bought MorphoSys, a cancer biotech, for $2.9 billion

  • CBRE Group bought J&J Worldwide Services for $1.05 billion

  • NinjaOne, an IT platform for endpoint visibility, raised $231.5 million

  • Starship Technologies, a delivery robot developer, raised $90 million

  • Ambience Healthcare, an AI operating system for healthcare companies, raised $70 million

  • Heura Foods, a plant-based foods maker, raised $44 million

For more PE, VC & M&A deals, subscribe to our Buysiders newsletter.

BOOK OF THE DAY

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DAILY VISUAL

Average Number of People per Household Declining

The average family size in the US has declined from 3.3 in 1960 to 2.5 in 2023

Source: Apollo

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DAILY ACUMEN

Negotiation

Effective negotiation is a skill that can lead to better outcomes in both business dealings and personal relationships.

It involves communication, empathy, and compromise to reach an agreement that is acceptable to all parties. Successful negotiators understand the importance of listening actively, articulating their needs clearly, and finding common ground.

By approaching negotiations with an open mind and a focus on mutual benefit, individuals can build stronger relationships, avoid conflicts, and achieve goals that might otherwise seem out of reach.

Developing negotiation skills can therefore have a profound impact on various aspects of one's life, leading to more favorable and harmonious interactions.

ENLIGHTENMENT

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MEME-A-PALOOZA

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