WeWork (or the We Company), the biggest co-working space company in the world, was last valued at $47bn. In comparison, the company is set to generate revenue of “meager” $3bn in 2019, with operating losses nearing -$3bn for the year. Can such a lofty valuation be justified by this type of financial metrics? To explore this question, we analysed its IPO filings as well as its business model, both of which bear a striking resemblance to a truly great business, Amazon. But, some context is required to truly appreciate the strange situation interested investors may find themselves in regards to WeWork’s IPO prospects.

Some Characteristics of a Great Business

WeWork indeed has built a business with some great characteristics like economies of scale and brand habit. For example, having a large scale could allow it to acquire leases more cheaply by being able to lease multiple floors, or even the