ReWork: The Principal Unprincipled

WeWork is ethically-challenged, to say the least. We might be on the edge of a major pushback.

Resolution and Adventure with fishing craft in Matavai Bay by William Hodges (Wikipedia, public domain)

Even if you've had anything to do with the business world over the last three years, you've heard of WeWork.

Their IPO has been massacred, from people like Scott Galloway (No Mercy / No Malice) to Ben Thompson (Stratechery). A big focus has been on the ridiculous valuation: $47 billion at one point — then last week readjusted to about half that amount, and then SoftBank, WeWork's largest shareholder, suggested putting the IPO on hold.

What's going on?

Personally, I think we're looking at the Pets.com of the modern era. In 2000, the online pet food company (great idea, poor timing) was the canary in the coal mine for the Dot Com era. With stratospheric valuations on negative margins, we're seeing companies like WeWork, Uber, and other unicorns defy logic.

As I noted last week, there's a mismatch of incentives. In this case, the only incentive investors have is getting the company to an IP…