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WeWork sues SoftBank over canceled $3B tender offer

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Re: WeWork sues SoftBank over canceled $3B tender offer

#41

Post by linuxftw »

code4tee wrote: post #5

Quote: WeWork’s board said that it “regrets the fact that SoftBank continues to put its own interests ahead of those of WeWork’s minority stockholders.” Of course they’re going do to that, it’s called fiduciary duty to their own stakeholders! Such diligence is something WeWork’s board seemed to casually overlook for far too long. At this point why would SoftBank buy WeWork shares that are in all likelihood worth litt…

> If 2 days before closing the house burns to the ground I can walk away.

The seller would be in default rather than you having a contingency. I'm sure there's plenty of case law in every jurisdiction covering this scenario.

Maybe SoftBank had no intention of buying out WeWork and were just using it as some sort of ploy to dig deeper into their books, etc.

Re: WeWork sues SoftBank over canceled $3B tender offer

#42

Post by dreamcompiler »

LatteLazy wrote: post #24
code4tee wrote: post #5

Quote: WeWork’s board said that it “regrets the fact that SoftBank continues to put its own interests ahead of those of WeWork’s minority stockholders.” Of course they’re going do to that, it’s called fiduciary duty to their own stakeholders! Such diligence is something WeWork’s board seemed to casually overlook for far too long. At this point why would SoftBank buy WeWork shares that are in all likelihood worth litt…

The fact they're suing does imply that there were not contingency clauses. Otherwise, why piss off your largest investor/shareholder/backer?

The "pissing off Softbank" horse has left the barn. Now WeWork is just trying to extract as much unburned rubber from its tire fire as it can.

Re: WeWork sues SoftBank over canceled $3B tender offer

#43

Post by pgwhalen »

eldavido wrote: post #38
pgwhalen wrote: post #23

Earlier quoted context omitted.

Source for that? I’d be curious what the top ten are.

Offhand...Walgreens? CVS? Wells Fargo? Chase Bank? Just look around you, much of the Fortune 500 is in mass consumer retail, and they tend to rent rather than own.

Ah fair, I was assuming office space but obviously “commercial” means a lot more than that. It seems worth diving office and retail markets though, I can’t imagine there’s much overlap.

Re: WeWork sues SoftBank over canceled $3B tender offer

#44

Post by DamnYuppie »

JumpCrisscross wrote: post #19
llsf wrote: post #13

I read that Wework had $4B in the bank at the beginning of the year. Also they are actively trying to reduce their own rent up to 30% from their landlords. And at the same time Wework gives up to 50% discount to its own large tenants, so they can stay during this hard time. No idea how long it can operate like that. If Wework had to crash, I am concerned for the whole US commercial real-estate. Wework is renting so m…

> WeWork is renting so many square feet WeWork is big. CRE is huge. WeWork is not even among the top ten largest lessees in America.

Do you mean CBRE? Regus is also very large in the rental space.

Re: WeWork sues SoftBank over canceled $3B tender offer

#45

Post by H8crilA »

jacquesm wrote: post #30
H8crilA wrote: post #26

I really hope WeWork wins this one. The world of "investing" needs to chill a little and see a few outrageously exuberant bulls absolutely destroyed before we go from a big bubble to a massive bubble, and then to a massive crash. But then again Masa was already possibly the worst investor in the history of humanity, even before the Vision Fund, so who will take note this time? If he lives through the next 20 years he…

They were funded based on the bubble, I don't see why the bubble collapsing wouldn't see them crash.

I just mean I'm cheering for this lawsuit. Every money taken away from stupid "VC" is a win for the future peace of the economy. And obviously it has a very magnified effect - most exuberant people only want to buy at some kind of "all time high". I.e. taking away $1 from Masa will reduce the "dumb money pool" by many times that dollar.

Re: WeWork sues SoftBank over canceled $3B tender offer

#46

Post by alasdair_ »

dheera wrote: post #14
JumpCrisscross wrote: post #6

Earlier quoted context omitted.

> it’s called fiduciary duty to their own stakeholders SoftBank has a fiduciary obligation to its shareholders. (Note: not all stakeholders. It has a duty to them. But it's not a fiduciary one.) It also has a fiduciary obligation to WeWork shareholders, by virtue of its Board seat. This case is, in summary, about how those duties conflict.

Conflict-of-interest is a human-invented notion that is rooted in the idea that the world is black and white, and it must be one or the other. That isn't the nature of how the rest of the universe operates. All that is needed is a weighting factor between the two loss functions (in this case, obligations) to deal with cases like this, and to make the policy (in this case, term sheet) continuous and differentiable as…

>Conflict-of-interest is a human-invented notion

Literally every legal concept is a human-invented notion.

Re: WeWork sues SoftBank over canceled $3B tender offer

#47

Post by mekoka »

jacquesm wrote: post #28

A big chunk of their intensifying crisis will be the drying up of whatever income they still had. Short term rentals are great for the renters: easy to say "stop now", and that's exactly what this COVID-19 crisis has done for many companies. If they were using WeWork before they are now using it less or not at all.

From a previous piece also by techcrunch https://techcrunch.com/2020/04/02/softbank-terminates-3bn-te...

WeWork’s handling of the coronavirus crisis has also caused some rifts with its membership, with press reports of members angry at it for refusing refunds for spaces they can’t (in good conscience) use. It has also faced criticism from members angry it’s prioritizing rent collection from now very cash-strapped small businesses rather than closing down during a public health crisis.

Re: WeWork sues SoftBank over canceled $3B tender offer

#48

Post by dheera »

JumpCrisscross wrote: post #18
dheera wrote: post #14

Earlier quoted context omitted.

Conflict-of-interest is a human-invented notion that is rooted in the idea that the world is black and white, and it must be one or the other. That isn't the nature of how the rest of the universe operates. All that is needed is a weighting factor between the two loss functions (in this case, obligations) to deal with cases like this, and to make the policy (in this case, term sheet) continuous and differentiable as…

> All that is needed is a weighting factor between the two loss functions Assuming this is sarcasm. If not, it’s an employment guarantee for litigators.

The ligitators can check to see if the loss function was evaluated correctly to within some sigma, and the ligitators can be robotic as well, in a couple decades from now. Most of what lawyers do is apply patterns they know from before for $900/hr, and that's exactly what machine learning is good at.

SoftBank is all about AI and I actually don't think AI lawyers would be a bad thing; it would be nice if they futurized their own corporate and investment structure by design instead of following today's defaults, including "fiduciary duty" in an absolute sense, which I think is an antiquated concept for a society 100 years from now.

SoftBank has the power to redesign concepts such as boards, shares, equity from the ground up, and they should be doing experiments with those ideas.

Re: WeWork sues SoftBank over canceled $3B tender offer

#50

Post by Mtinie »

eldavido wrote: post #35
gullyfur wrote: post #15

Earlier quoted context omitted.

Has anyone estimated how many months WeWork has until it collapses?

Is this informed by any data or facts whatsoever? Last time I checked, WeWork was a going concern with 600,000 customers more or less happy with their service. What would tank them? Are their lease obligations too large and can't be renegotiated? This entire thing is blown so far out of proportion. Like Tesla, it seems like a company that mostly makes products people like, whose equity is extremely hard to value. May…

"WeWork was a going concern with 600,000 customers more or less happy with their service."

This may have been true in December 2019, but with a global patchwork "stay at home" regulations in place, I suspect co-work spaces (especially of the open floor plan variety) are devoid of paying customers. That presumes they're even allowed to be open right now.

I don't remember offhand what the average WeWork customer generates in revenue or if the bulk of those customers are month-to-month vs. mid- to long-term contracts. If the former I don't see why those customers would continue to pay for space and services they don't have the ability to use.

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