WeWork becomes public company after dramatic implosion
WeWork is now a state-owned company worth more than $ 9 billion – a rationale for the costly turnaround strategy employed after its dramatic implosion in 2019. Like many companies on the brink of death, this who did not kill them made them stronger.
Why is this important: Hertz, Alamo Drafthouse, Airbnb and Toast are among the currently thriving businesses that were rocked at the start of the pandemic – providing further evidence of the theory that in the words of former Fast Company editor Bill Taylor, “companies can’t be great unless they almost fail.”
The big picture: Companies that reported more than 10,000% over 30 years – “superstocks” as they used to be baptized by fund manager William Bernstein of Efficient Frontier Advisors – all of them tend to collapse at least once along the way.
- Buy Apple Stock Thirty years ago that would have been a fantastic investment, for example: an investment of $ 100 in October 1991 would be worth $ 40,000 today.
- It was a very bumpy race, however: the same $ 100 would have been worth only $ 26.75 at the end of 1997.
Where he is : The pandemic has dealt a near-fatal blow to many companies, especially in the service sector, which have subsequently been forced to fold and rationalize.
- Airbnb was forced to lay off a quarter of its workforce when the pandemic struck, after “everything stopped working at the same time”, according to its CEO. It then went public in late 2020 and is now worth over $ 100 billion.
- Hertz and Alamo Drafthouse both went through cleaning bankruptcies before emerging as stronger versions of themselves, no longer burdened with inherited debt and unwanted properties.
The bottom line: If great success results from dismal failure, then most of the time it comes after an idiosyncratic disaster – think of the The Qwikster debacle at Netflix, for example, which dropped its share price by 77% in four months.
- The pandemic, by contrast, was systemic, hitting thousands of businesses simultaneously. This caused a rare occurrence: many companies (think Toast) are now skyrocketing in stock charts as part of a widespread post-pandemic rebound from crisis lows.