WeWork: The high-profile startup is still going

11/13/22 7:00PM

We-still-workin’

‍After a spectacular failed attempt at an IPO 3 years ago, many expected high-profile co-working startup WeWork to crash and burn. But WeWork is still going, announcing recently that it would cut another 40 locations in the US, as the company continues to narrow its focus.

Since the company’s implosion in 2019 — which was wild enough to inspire a TV show starring Jared Leto and Anne Hathaway — WeWork has been restructuring under new management. After founder Adam Neumann stepped away from the company, with a few billion in his pockets, the company lurched from one crisis to another, as COVID shuttered offices and the occupancy in WeWork buildings fell below 50%. Because WeWork doesn’t own its buildings, instead taking out long-leases to sell short-leases, that meant major losses.

However, under CEO Sandeep Mathrani, WeWork’s losses are starting to narrow. Gone are the days of rampant growth, replaced with a renewed focus on fewer locations and more discipline throughout the organization. That has helped losses narrow from billions to "only" hundreds of millions. The WeWork model is working better... but it's not quite there yet.

Max Knoblauch10h

Paramount reportedly receives $24 billion from Gulf funds to back its Warner Bros. takeover

Three Middle East sovereign wealth funds have agreed to back Paramount’s takeover of Warner Bros. Discovery to the tune of roughly $24 billion, according to Wall Street Journal reporting.

The company’s triumph over Netflix in the bidding war came thanks in part to financial backing from Oracle cofounder Larry Ellison, billionaire father of Paramount CEO David Ellison.

Saudi Arabia’s PIF, which last year led the $55 billion deal to take Electronic Arts private, will provide about $10 billion in the deal. The Qatar Investment Authority and Abu Dhabi’s L’imad Holding Co. is also involved.

According to the WSJ, the funds will not receive voting rights in the combined Paramount-Warner company. Those working on the deal don’t expect the Gulf funds’ involvement to spark any additional regulatory reviews.

Exclusive | Gulf Funds Agree to Back Paramount’s $81 Billion Takeover of Warner

The company’s triumph over Netflix in the bidding war came thanks in part to financial backing from Oracle cofounder Larry Ellison, billionaire father of Paramount CEO David Ellison.

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That’s less than 1% of its peak market cap about four years ago.

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JetBlue is raising its bag fees as fuel costs squeeze airlines

JetBlue will reportedly hike its bag fees, as the cost of jet fuel continues to climb amid the war in Iran. It’s the latest example of carriers finding ways to push rising costs onto travelers.

Last week, United Airlines CEO Scott Kirby said that if fuel prices remain elevated, fares would need to rise another 20% for his airline to break even this year.

As CNBC reported, when one airline raises fees, others tend to follow.

Earlier this month, JetBlue hiked its first-quarter outlook for operating revenue per seat mile to between 5% and 7%, saying that strong Q1 demand helped “partially offset additional expenses realized from operational disruptions and rising fuel costs.” Now, the carrier appears to be making moves to further boost revenue to offset those costs.

Earlier on Monday, JetBlue rival Alaska Air lowered its Q1 profit forecast. The refining margins for the carrier’s cheapest fuel option — sourced from Singapore and representing about 20% of Alaska’s overall supply — have spiked 400% since February.

JetBlue did not immediately respond to a request for comment.