WeWork, a startup worth 50 billion is now bankrupt, but the founders made a billion each. They created a company, hyped up the business and then sold their shares. It started with 111 flexible offices globally and employed 12,000 people, but it never made a profit. Why?
The remote working co-share workspace company was hyped up to sell more shares and fund the ongoing business and then covid hit and flexible working became home working. The hype continued and then the founders sold their shares.
As an investor, you need to be cautious of overhype and consider it a red flag if founders sell shares early.
But don’t shun all the hype. AI, for example, has a major hype around it and could make a massive difference in how we work, and most AI companies are making a profit. Look for steady growth, solid business practices and profitability.
Don’t sit on the sidelines out of fear or indecision. Get the advice of an experienced financial advisor and look for investment opportunities. Most importantly, keep your investments diversified across various sectors, asset classes and economic regions.