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The company WeWork has one of the most fascinating stories of all time. It was a company whose valuation absolutely exploded in record time, and their former CEO Adam Neumann who started the company led it like a cult. It was once one of the most talked about companies of all time and was once valued at 47 billion dollars. Unfortunately, cracks in the business began showing the light of day and the company crashed hard and Adam Neumann was forced out. Most people are aware of that story but what people might not know about is the current state of WeWork.
WeWork went public via SPAC last October and currently has a market cap of around 7 billion dollars which is significantly less than the 47 billion dollar valuation they used to have. It's important to remember that the 47 billion dollar valuation that it once had really made no sense for them to have so while their 7 billion dollar valuation is obviously a low lower than what they had during the WeWork craze, I do think that this is a good valuation for the company.
Their P/S ratio is 2.19 which is not great but it's not terrible. They are, however, not profitable which makes sense as they are a growth stock and are more concerned with growth than making a profit. They also have about 22 billion dollars of debt which is a lot, but it also makes sense for them to have this as they are, after all, a real estate company.
So should one buy WeWork's stock? It's a very risky play, but if one has the risk tolerance, it could be one worth making. WeWork has a lot of plans to grow and a lot of ways to increase their revenue. This could be a great stock to hold onto if WeWork can execute their plans well. One might consider adding it to their watchlist and following the stock for a bit before buying.
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