Conference & Meetings World Issue 102 - Page 8

News EMAIL THE CMW EDITORIAL TEAM WITH ALL YOUR INDUSTRY NEWS: FOR ALL THE LATEST BREAKING NEWS & DAILY UPDATES, VISIT: WeWork reveals losses as it struggles to elevate IPO consciousness ICCA board in Tel Aviv following $100m Eurovision renovation The board of the International Congress and Convention Association (ICCA) recently visited Tel Aviv to meet key Israeli industry figures. The three-day trip was organised by the Tel Aviv Convention Bureau and the Israel Ministry of Tourism and enabled ICCA Board members to meet Amir Halevy, CEO of Israel Ministry of Tourism; Eytan Schwartz, CEO of Tel Aviv Global & Tourism; Tamir Dayan, CEO of Expo Tel Aviv, as well as ICCA members from Israel. The delegation also visited key locations and venues around the city, including Expo Tel Aviv which hosts hundreds of conferences annually, and = recently the Eurovision Song Contest, which turned into the largest international event in the history of the city. It took place in Expo’s Pavilion 2, which had undergone a US$100m renovation. James Rees, ICCA President said: “Tel Aviv has it all; amazing history, a thriving innovation scene and a cosmopolitan feel. The story of this destination will surely capture the heart of each and every visitor”. 8 / CONFERENCE & MEETINGS WORLD WeWork, the international flexible office provider, has revealed large losses as it attempts to float on the stock market. Its co-working space provider parent holding, We Company, announced the financial news on 14 August. It was news that has been met with a storm of criticism, most notably on Twitter. Releasing its financial information ahead of an IPO, WeWork reported a US$1.9bn pre-tax loss for in 2018, up from a $939m loss in 2017 and of $430m in 2016. 2019 is also in the red to the tune of $900m for the first six months. WeWork provides working spaces, with rental agreements available for as short as one month. The brand has built a hipster reputation with games rooms and free beer and coffee. As distinct from IWG’s Regus brand or etc. venues, however, the spaces do not offer much privacy and few doors in their open plan layouts. Analysts have suggested the company is looking to raise at least $3bn although has not, at time of writing, said where it is intending to list. The WeWork IPO prospectus was widely mocked on social media, notably for some anodyne and New Age musings and straplines, including on the cover page of its prospectus: ‘We dedicated this to the energy of We – greater than any one of us but inside each of us.’ The document also informs potential shareholders WeWork’s “mission is to elevate the world’s consciousness”. It was also revealed that there are minimum future lease obligations of $47bn over the next 15 years. The London Financial Times commented: “Over the past three-and-a-half years, Wednesday’s SEC filing reveals, WeWork made a total of $20.9m in lease payments to four properties in which [CEO] Adam Neumann has an interest, receiving $11.6m back in ‘tenant improvement reimbursements’ last year. Barring future discounts, it is still on the hook for almost another $237m in payments over the life of the leases.” The company has moved to unpick this financial relationship with its CEO and said Neumann would sell his properties to a new entity called ARK, with ARK covering the costs Neumann incurred in buying the four properties. A selection of comments posted on Twitter following announcement from WeWork included: ‘I think my favourite WeWork thing is that it rents buildings owned by the CEO, who bought the buildings by borrowing against WeWork stock. Nobody seems to be questioning why this is okay…’ San Francisco-based technology expert Laurie Voss / ISSUE 102 ‘WeWork’s IPO filing will be a key test of investor appetite for fast-growing, money-losing start-ups’ Reuters ‘WeWork’s all-male Board is pretty typical of IPOs these days’ Bloomberg ‘Based on the reporting about its IPO, @WeWork is basically just a commercial property management company that also includes some Enron-like legal structures and self-dealing transactions and Marianne Williamson-like self-help branding. Do I have that right? Disruption! Synergy! Graham Steele, US financial regulation expert