WeWork CEO Points to Uber's Losses as Example of ‘Growth Issues’

(Bloomberg) -- WeWork is known for losing oodles of money but that didn’t stop Chief Executive Officer Adam Neumann from poking Uber Technologies Inc. -- another company with an affinity for burning through cash.

In a private meeting with analysts this week, Neumann criticized ride-hailing companies Uber and rival Lyft Inc. for spending aggressively to fuel growth, according to a person familiar with the matter who asked not to be named because the meeting was confidential.

“I look a little bit around at Uber and Lyft,” Neumann said. “I think there were growth issues. I think when you grow at any price there are consequences.”

Neumann’s comments will surely draw eye-rolls from people looking at his own company’s financials. WeWork’s loss from operations totaled $1.7 billion on $1.8 billion in sales in 2018. Such numbers give ammunition to the company’s critics. In Neumann’s defense, Uber recorded $3 billion in operating losses. But at least it generated $11.3 billion in revenue.

In discussions with analysts, WeWork executives provided projections for the company’s revenue growth rate, targeting 28% going into 2024.

That growth rate projected by the company is “now is 100% achievable,” Neumann told the analysts during a confidential closed door meeting. “I do want you to be very comfortable with those numbers because we’re going to deliver.”

In the meeting, WeWork’s executives sought to guide the independent financial analysts’ models for the company’s expected financial performance. The executives provided forecasts and other color on the business -- some of it is not disclosed in the company’s IPO prospectus.

WeWork parent We Co. is expected to begin its roadshow as soon as next week, people familiar with the plans have said. Expectations for the company’s public valuation have fallen to as little as $20 billion, according to people familiar with the matter, potentially less than half the $47 billion valuation it obtained earlier this year.

To contact the reporters on this story: Gillian Tan in New York at gtan129@bloomberg.net;Eric Newcomer in New York at enewcomer@bloomberg.net

To contact the editors responsible for this story: Mark Milian at mmilian@bloomberg.net, Molly Schuetz, Robin Ajello

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