• Triton

The WeWork S-1 that could have been.

Oh man, check out this investor deck WeWork posted the other day (and Matt Levine flagged yesterday). They had the good stuff all along but didn't share.

Occupancy rates, cohort analysis, churn rates, Enterprise breakouts. All the metrics that were obviously and vexingly missing from the S-1.

Since WeWork has barely had time to convert the sauna in Adam’s office into a broom closet and get the Gulfsteam listed on eBay, it seems obvious this information was ready to go but nixed by the visionary-in-chief.

Here we have near-perfect case studies in 1) the wide latitude company founders have in sharing (or not sharing) relevant data with prospective IPO investors, and 2) the massive information asymmetry between public- and private-market investors.

When we go out of our way to give attaboys to Peloton for actually disclosing its acquisition and churn metrics when no one else does, this is what we are talking about.

When we whine as loudly as we can that companies like WeWork of course know what good disclosure looks like and of course have on hand all the metrics any diligent and curious analyst would want, but instead file platitudes and "illustrative" nonsense numbers, this is what we are talking about.

And when we gripe that public investors are subject to outrageous insult when they get served processed pablum in IPO prospectuses in contrast to the rich disclosure the private investors who went before have gotten, this is what we are talking about.

For public-market investors this 49-page deck is a treasure trove of detailed metrics rarely seen in an S-1. For private-market investors this deck is childsplay – just a summary with an entire data room behind it holding gigabytes of detail.

Matt Levine correctly points out that the S.E.C. enforces a very strict and inflexible template on IPO issuers. As much as it's just good policy for avoidance of embarrassment to agree with Matt Levine in all things, it seems to us that there are precedents – Spotify being the most obvious – of rich "non-GAAP" disclosure to go with all of the required financial statements and prose narrative the template demands.

The WSJ wrote a great story yesterday about the pushing and shoving between WeWork's weapons-grade legal team and the S.E.C. about the confusing and incomplete nature of WeWork's disclosure. The S.E.C. has to put up a fight in the face of purposeful obfuscation.

But do we have a test case for the S.E.C. rejecting detailed disclosure because it was just too good, and too relevant, and too helpful to investors who really like to do the work? I mean why would anyone want to build a model at the unit level before handing over $3 billion to buy common equity in a levered cash furnace?

If we want such a case study, let's see what happens if – when they are ready to try again – WeWork files an S-1 with this goldmine of unit metrics and leaves "community-adjusted contribution to consciousness" out of it.

It could have gone down differently if they'd done it that way the first time.