Two big numbers — $4 billion and $47 billion — sum up WeWork's business model and the risky reason it could collapse in a recession

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The two numbers illustrate just what kind of business it's in — and their huge difference in size show its risks.

But two sets of related figures stood out — $4 billion and $47.2 billion on the one hand, and 15 months and 15 years on the other.

"They've got big long-term liabilities, and if the people who are their customers don't have long-term commitments to them, the risk is high," said Robert Siegel, a lecturer in management at Stanford Graduate School of Business."Forty-seven billion dollars," he continued,"is a lot of money."As might be expected, WeWork was much more eager to highlight some of those numbers than others.

"Going forward, we believe that we are well positioned to navigate through further economic downturns," the company said.But the company didn't seem nearly as eager to highlight the other two numbers. It mentioned the $47.2 billion figure only three times and the 15-year figure just four times.

However, it might not be as easy as all that. Its landlords would almost certainly try to enforce their agreements with WeWork if it tried to skip out on them. It also would face reputational harm — and a huge risk to the future of its business — if it started sending its subsidiaries into bankruptcy and having them default on their loans instead of keeping up with the rent they owe.

 

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