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News: WeWork, Uber & the moment of reckoning in venture capital

HOSTS Alec Renehan & Bryce Leske|14 October, 2019

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WeWork has been front of mind over the past few weeks. The office space leasing company funded by Softbank’s Vision Fund had expected a $47 billion value at IPO. Instead, the company had to pull its IPO as its expected value dropped to below $20 billion. Days later, the company dismissed the co-founder and CEO Adam Neumann. After pulling the IPO, questions have now arisen about WeWork’s ability to stay solvent. Some estimates suggest WeWork may run out of cash within the year (for context: in 2018, WeWork lost $1.8 billion or $200k every hour).

In this episode of Equity Mates, we make the case that WeWork is just the tip of a VC-fuelled, over-inflated iceberg. In fact, over the last few years a number of unprofitable unicorns (a unicorn is a private tech company valued at $1 billion or more) have gone public. It seems that public market investors are not as tolerant of companies that lose money, and this has been reflected in their share price. To give you an sense of what we’re discussing, below is a list of a few companies mentioned in this episode and their share price movement since IPO (price as of recording date):

• WeWork pulled IPO

• Uber down 29%

• Lyft down 50%

• Slack down 33%

• Spotify down 21%

• Snapchat down 46%

• Dropbox down 31%

• Peloton down 19%

In this episode you will learn:

• How WeWork is just the tip of the iceberg of tech unicorns now struggling in public markets

• What led to these inflated valuations in the first place

• How the iPhone’s release in 2007 sparked a decade-long, venture capital boom

• What recent VC megadeals, including deals by Softbank, have meant for these companies

• Why now is the time that this VC bubble is ending

• How public market investors should think about these events Remember, our live show are coming up fast. Register for free today so you don’t miss out.

• Melbourne – Wednesday 23 October – 6pm

• Sydney – Tuesday 29 October – 6pmFor all the details and to register: https://equitymates.com/finimize/

If you want to let Alec or Bryce know what you think of an episode, contact them here. 

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Equity Mates Investing Podcast is a product of Equity Mates Media. 

All information in this podcast is for education and entertainment purposes only. Equity Mates gives listeners access to information and educational content provided by a range of financial services professionals. It is not intended as a substitute for professional finance, legal or tax advice. 

The hosts of Equity Mates Investing Podcast are not financial professionals and are not aware of your personal financial circumstances. Equity Mates Media does not operate under an Australian financial services licence and relies on the exemption available under the Corporations Act 2001 (Cth) in respect of any information or advice given.

Before making any financial decisions you should read the Product Disclosure Statement and, if necessary, consult a licensed financial professional. 

Do not take financial advice from a podcast. 

For more information head to the disclaimer page on the Equity Mates website where you can find ASIC resources and find a registered financial professional near you. 

In the spirit of reconciliation, Equity Mates Media and the hosts of Equity Mates Investing Podcast acknowledge the Traditional Custodians of country throughout Australia and their connections to land, sea and community. We pay our respects to their elders past and present and expend that respect to all Aboriginal and Torres Strait Islander people today. 

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More About

Meet your hosts

  • Alec Renehan

    Alec Renehan

    Equity Mates Co-Founder

    Alec developed an interest in investing after realising he was spending all that he was earning. Investing became his form of 'forced saving'. While his first investment, Slater and Gordon (SGH), was a resounding failure, he learnt a lot from that experience. He hopes to share those lessons amongst others through the podcast and help people realise that if he can make money investing, anyone can.
  • Bryce Leske

    Bryce Leske

    Equity Mates Co-Founder

    Bryce has had an interest in the stock market since his parents encouraged him to save 50c a fortnight from the age of 5. Once he had saved $500 he bought his first stock - BKI - a Listed Investment Company (LIC), and since then hasn't stopped. He hopes that Equity Mates can help make investing understandable and accessible. He loves the Essendon Football Club, and lives in Sydney.
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