It’s time for us to talk about WeWork. As you may have heard, WeWork’s IPO is in a bit of trouble. This week, it officially postponed its IPO (MarketWatch). But WeWork insists that the IPO will take place this year. That’s because WeWork needs to IPO in 2019 in order to access a $6 billion credit facility that expires at the end of the year (CNBC).
Investors are more than willing to invest in companies going public. Beyond Meat, Zoom and CrowdStrike did extremely well. Cloudflare and Chewy did well too. So WeWork can’t blame “the environment” for the poor response to its proposed IPO.
What did WeWork in is that it can’t make money. Or at least not yet. In 2018, WeWork had $1.8 billion in revenue. And it lost $1.9 billion. In the first six months of 2019, it had $1.5 billion in revenue and $905 million in losses. Basically, to generate $1 in revenue, WeWork has to spend $2. It’s not shocking that investors aren’t thrilled with that.
That’s why changing WeWork’s corporate governance to reduce the power of co-founder and CEO Adam Neumann didn’t work (Los Angeles Times). The numbers aren’t adding up. And Neumann, who reportedly cashed out more than $700 million of his share of the company through stock sales and debt prior to the IPO, isn’t inspiring confidence in his ability to lead WeWork to profitability (The Wall Street Journal).
WeWork hopes to change the narrative by delaying its IPO. The Fix humbly submits that nothing WeWork has done suggests it can change – or is capable of changing – the narrative by itself. But if WeWork wants help, the Fix stands ready to provide it – for a fee. We are communications professionals, after all.
Now on to the News Fix!
Cannabis
NIH approves $3 million in grant money to see if marijuana is an opioid alternative: Because marijuana is illegal at the federal level, there has been very little federally funded research on the benefits of medical marijuana. That’s starting to change. The National Institutes of Health (NIH) has just awarded nine grants to fund research that will look at different parts of the marijuana plant to see how they combat pain (Marijuana Moment).
The average price of wholesale weed in Colorado is rising: The average wholesale price of marijuana between May 1 and July 31 was $999 per pound. It was $850 per pound in the three months prior. And it’s the fourth straight reporting period with an increase in wholesale prices. Last October, the average marijuana wholesale price was $759 per pound (The Denver Post).
Massachusetts’ marijuana vape sales down amid health concerns: The health scare surrounding vaping is driving marijuana vape sales down in Massachusetts. Officials suspect vaping is the cause of a new lung condition that has killed seven people and caused more than 500 others to fall ill. The exact ingredient causing the illness is unknown. Massachusetts’ marijuana vape sales are down 25% as a result. And the decline reflects a larger pattern nationwide (The Boston Globe).
Startups
Startups love Slack: About 60% of startups use the Slack messaging platform to communicate and collaborate at work, according to data from Kruze Consulting. But in larger organizations, just 33% use Slack, while 65% use Microsoft Teams (Recode). Here at the Fix, we prefer Slack. Teams is a vastly inferior product (in our humble opinion). So why do so many big companies use Teams? Because it’s free if you buy Microsoft Office.
Institutional investors pour money into CircleUp: CircleUp is an interesting startup. It gives fellow startups loans to help them grow. The goal behind the loans is to give founders the funds they need to scale their business without having to give away control (or their share) of the company. Institutional investors seem to love the concept – and CircleUp. They just invested $200 million in the company (Forbes).
Crypto
SEC chief says bitcoin trading needs to be “better regulated”: Securities and Exchange Commission (SEC) Chairman Jay Clayton says bitcoin won’t be traded on “major exchanges” until trading is “better regulated” (CNBC). Apparently, Clayton wants the crypto industry to do the “better regulating” and get back to him. That leaves the Fix wondering about the purpose of the SEC. If the industry is doing the regulating, why do we need the SEC?
U.S. Army interested in hiring crypto investigators: Investigators love when criminals use bitcoin for illicit activities. That’s because the bitcoin blockchain is public. And investigators who know what they’re doing can use it to follow the money trail. Now the U.S. Army wants to ramp up its ability to track illicit activity using crypto (Cointelegraph). It’s a pretty smart move. And we hope Congress notices. Because one of its top complaints about crypto is that it can be used by criminals. Meanwhile, investigators are hoping criminals are stupid enough to use bitcoin. Oh, the irony.
Binance returns to the U.S.: Earlier this month, Binance stopped serving American customers on its main crypto trading platform, which isn’t regulated in the United States. This week, Binance is open for business again in the U.S. with a regulated exchange. The new regulated exchange is completely separate from the global Binance trading platform. It offers significantly fewer coins for trading. And it’s operating in only 37 out of the 50 states (and Washington, D.C.) (Yahoo Finance).
And finally…
Walgreens will begin testing drone delivery of food, drinks and over-the-counter medications next month (CNBC). Alphabet (Google) will be handling the drone delivery for Walgreens.
And that’s your News Fix.