, no longer made the cut. He is worth closer to $800 million, after losing more than $1 billion in a single month.
All these moves are part of his plan to ensure that his financially conservative firm can not only withstand the pandemic but come out of it stronger. It very well may work, for two simple reasons: He’s been here before, having survived the original dot-com crash that almost killed his business, and he runs a tight ship. While WeWork followed the Silicon Valley playbook of growth at all costs—losing some $2.2 billion on revenues of $2.
His bet—that companies would pay a premium to have access to work spaces around the world if someone else handled the hassle, paid off. But the business is especially susceptible to big global shocks—“9/11, SARS, swine flu, volcanoes, earthquakes, cyclones, shootings. You name it, we’ve had it somewhere,” he says.
As he’s expanded, he’s been careful to make his landlords more like business partners rather than simple suppliers. In some cases, IWG gives them a cut of a property’s revenues or profits in exchange for more favorable terms. More than a quarter of IWG’s leases are variable like this, which mitigate risk by giving landlords some of the upside but putting them on the hook for some of the downside, too.
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