WeWork Documentary

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Whitney Tilson’s email to investors discussing the WeWork documentary, and Biden’s big plans.


Q4 2020 hedge fund letters, conferences and more

WeWork Documentary

1) On Friday, Hulu released a documentary about WeWork: or The Making and Breaking of a $47 Billion Unicorn (you can watch the trailer here).

As my wife and I watched it over the weekend, every few minutes we looked at each other and shook our heads in amazement that anyone could have fallen for such an obvious con man as co-founder and former CEO Adam Neumann (and his even more narcissistic, delusional wife, Rebekah).

If you liked the Theranos and Fyre Festival documentaries, you’ll love this one!

I heaped plenty of scorn on the Neumanns and WeWork around the time of its aborted initial public offering (“IPO”) and all of my predictions came true (that the bankers would pull the IPO, the Newmanns would be ousted, etc.), but I was wrong that the company would go bankrupt.

In fact, its primary backer, SoftBank, bailed it out and brought in professional management, and the company announced just 10 days ago that it plans to go public shortly by merging with a special purpose acquisition company (“SPAC“) called BowX Acquisition (BOWX), whose stock has risen 33% to $12.93 since the deal was announced.

Given that there’s a $10 floor on the stock until the deal closes (reflecting the cash every SPAC holds in escrow), the current price isn’t completely bonkers. I might even be tempted to buy some if it falls under $11 per share…

Biden’s Big Plans

2) Regardless of your views on what the Biden administration did in passing the stimulus package and what it’s proposing to do with the infrastructure package, it’s important for every investor to understand the potentially profound implications for the economy and stock market.

Here are two articles from the New York Times and the Wall Street Journal with insightful looks…

NYT: Biden Tax Plan Challenges G.O.P. Formula for Economic Growth. Excerpt:

President Biden’s ambitious plan to increase corporate taxes does more than just reverse much of the overhaul pushed through by his predecessor. It also offers a profoundly different vision of how to make the United States more competitive and how to foot the bill.

WSJ: Behind Biden’s Big Plans: Belief That Government Can Drive Growth. Excerpt:

President Biden envisions long-term federal spending claiming its biggest share of the American economy in decades. He wants to pay for that program in part by charging the highest-earning Americans the biggest tax rates they’ve faced in years.

Best regards,