WeWork, a commercial landlord pretending to be a tech-lifestyle company, raised over $700 million in a bond offering yesterday, and it seems they are taking a page from Groupon’s accounting playbook, offering a ludicrous profit metric for all of our enjoyment:
In the offering documents, WeWork went to unusual lengths to show ways in which the company would be profitable. While many companies typically offer “adjusted” earnings, WeWork offered three different layers of adjustments.
It called the fully adjusted number “community adjusted Ebitda,” by which it subtracted not only interest, taxes, depreciation and amortization, but also basic expenses like marketing, general and administrative, and development and design costs. Those earnings were $233 million, WeWork said.
“I’ve never seen the phrase ‘community adjusted Ebitda’ in my life,” said Adam Cohen, founder of Covenant Review, a bond research company.
There are lots of unflattering things that someone could say about your company’s ridiculous non-GAAP metric, but I have a hard time thinking of something worse than “I’ve never seen that in my life.”