Greed is god
At this point, if you aren’t going public via a direct listing, traditional IPO or SPAC, are you even a growthy business?
Every CEO I talk to at a startup that’s doing more than Series B-level revenue tells me that SPACs are circling, hungry for a deal so they won’t have to return collected capital to their original backers. There’s an old joke: If all you have is a hammer, everything looks like a nail. Except this time, if all you have is a blank-check company, every erstwhile startup looks like a public company in waiting.
Enter WeWork. Yes, the company famous for torching a mountain of cash that would rival the Ever Given in sheer bulk is going public via a SPAC. This morning we’re going through its investor presentation, asking ourselves questions like, “Is this as nasty a business as it was a few years ago?” and “Why, oh God, why do we have to talk about WeWork again?”
But that’s not all. Axios, the rare media startup that appeared positioned for a good run, could merge with The Athletic and go public via a SPAC. At least per WSJ reporting.
It’s possible to summon arguments in favor of the deal. The Athletic has what Axios lacks and vice versa, so perhaps combining the former’s subscription base with the newsletter-and-ads prowess of the latter would make for an attractive company. Maybe.
But the main gist of this morning is that private investors in companies of all stripes are trying to get their money out while it’s still possible. That’s why we’ve seen eleventy-seven lidar and electric-vehicle SPACs. These aren’t usually companies that are ready to go public; they’re companies with investors that are ready to cash out.
The same momentum applies to the WeWork deal and the possible Axios combo-and-SPAC, I reckon.
Today, greed isn’t really good, to quote an old movie. It’s been good for so long among the tech-and-money class that quoting a film about a corrupt financier is too boring to warrant even warmed-over ennui. Instead, greed is god, and we’re all watching its ascension.
Now let’s digest the latest sacrifices.
First, is WeWork a recovered company that has shown an ability to grow while losing less money? Not really.