Is This IPO a Repeat of 2019's Biggest Mistake?

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Michael Zuber (0:18)

Ew.

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Michael Zuber (0:31)

All righty, folks, we are going to have a conversation about a company who is deemed the most ridiculous IPO of 2026 But before we do that, I want to step back in the time machine and talk about the call of the most ridiculous IPO of 2019 Because when somebody makes a bold call like this, I think it's important to look at their history and simply ask, have they been right before?

Dana, I don't know if you know what's coming up, but we're going to step in a time machine and talk about WeWork. You remember WeWork way back in the day?

Dana (1:03)

Oh, yeah, the margins did not make sense. And after that fiasco, I think the number one question we would get from investors is, what does your gross margin look like?

Michael Zuber (1:15)

Yeah, WeWork was a company, obviously, I think it's Adam Newman, where he went out and leased entire buildings and then tried to lease or rent by the foot. Again, it kind of logically made sense, but unfortunately, 2019, 2020 was a horrible time to rent office space. And again, this company is called New Contract, they're a research firm. And in 2019, right when WeWork was going public, because they filed an S1, they had the road show, this company, this research firm called WeWork, the most ridiculous IPO of 2019

That report and other negative things during the road show caused WeWork to pull their IPO, ultimately never going public and filing bankruptcy. So you got to give them credit. They called that one correct. Yeah.

Dana (2:05)

Yeah, they did. And before anyone else did, I think, You know, WeWork was hot. Although Adam, in that particular case, he was a freaking good fundraiser. Like that was his strategy and his thing of just raise more capital, raise more capital, and eventually we'll figure out the gross margins.

Michael Zuber (2:25)

Yeah.

Dana (2:25)

Yeah.

Michael Zuber (2:26)

We're going to grow out of it. That's just kind of... Yeah. So again, I've been following, obviously, AI companies, Anthropic, OpenAI, I have my opinions about both. But I read this research report again from New Contracts. It's a research firm. You can Google it.

They call Anthropic, Anthropic IPO, the most ridiculous of 2026 And of all the negative things, Dana, they said, I'm going to read you the most damaging one, in my opinion. So this is about Anthropic. The company has growing operating losses, combined with a rise in popularity of open-source models, leaves Anthropic without a viable business model.

So that's not good, right, Dana?

Dana (3:14)

Yeah. Well, I'm going to take a little bit, I'm going to take a little bit different of a perspective than you want it.

Michael Zuber (3:22)

Sure.

Dana (3:25)

So let's go back to open versus closed, right?

I think that closed or open has to exist. In order to make AI something that is good for just the world and everyone out there and access to AI for humanity, it's a good thing to have open because it's going to be cheaper.

And, you know, anyone getting access to it could build great things. You don't just have to have a lot of money and a contract with Anthropic. So one, I think open will always exist. I think what's too early to tell with it is if you are closed, what additional value do you add? And is that value enough versus what someone is paying? And what I mean by that is I think on the business side, security is going to be something that a lot, most businesses care about. Even for us, we're constantly thinking about where is our data, making sure, because we've never sold customer data and we don't ever plan to do that. And so for us, it's very important that any information doesn't get out there for our customer's sake. And so what you would have to think with Closed is what additional offerings do you have that makes it worth the price? And I think it might be too early to tell. There is this hypothesis that, hey, the Closed are going to, people aren't going to be willing to pay as much for them. But I'm curious on your thoughts with it, because there, you know, there's a lot of smart people at Amprofic. There's a lot of smart people at OpenAI.