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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

#51

Post by dreamcompiler »

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…

They were basically insolvent when the extra Softbank cash failed and the IPO failed. And that was before COVID-19.

But you make a good point: They owe so much in leases they have huge negotiating power, and with COVID-19 they probably have even more since nobody's renting space right now.

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

#52

Post by dheera »

alasdair_ wrote: post #46
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…

>Conflict-of-interest is a human-invented notion Literally every legal concept is a human-invented notion.

Sure, but to me, ALL human-invented notions are subject to interpretation and change over the times.

We had kingdoms, slaves, and eye-for-eye punishment before and we largely don't have those concepts today in the developed world.

The same is true for conflict-of-interest, fiduciary duty, and today's version of capitalism.

If I had said "we don't need slaves" 400 years ago, I would have been downvoted like crazy. And here I am, saying conflict-of-interest and fiduciary duty will be antiquated ideas, and I'm being downvoted here today. Let's have an open mind about the future, shall we? I'd rather in a community like this we put everything we blindly assume today on the table with an open mind and discuss how we can change or improve the system.

On a related note, AlphaGo is able to play against itself using a single CPU/GPU, and it gets better by doing so. Why can't a human play against itself and get better as well? Are we brainwashing ourselves into thinking we are unable to do that, and so we are not trying?

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

#53

Post by xenospn »

tonyhb wrote: post #20
toomuchtodo wrote: post #9

Earlier quoted context omitted.

SoftBank just has to wait for WeWork to exhaust its cash reserves. It's clear SoftBank will take whatever steps are necessary for the deal to close and them light another $3B on fire. From a paywall FT article [1] quoted in Matt Levin's piece ("WeWon't") on this: > "Thousands of WeWork tenants have refused to pay rent or sought to terminate their leases over the past month, heaping pressure on the lossmaking group as…

Ran through some numbers from their S1's and Harvard Business School's anaylsis. By mid Q3 they'll be out of cash at their current burn with no new money, given their 2020 obligations.

I'm just really sad for all the people who worked really hard building the company (regardless of what stupid things the founder did) and are watching it all burn down in real-time.

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

#54

Post by draw_down »

ConcernedCoder wrote: post #16
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…

Cue: Kenny Rogers music: "...You gotta know when to fold'm.... know when hold'm.... know when to walk away... and know when to run!"

Come on

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

#55

Post by gamblor956 »

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 not rooted in the idea that the world is black-and-white.

It's the opposite. It's rooted in the idea that the world is shades of gray, and so the conflict-of-interest rules try to (a) eliminate situations where you would have to choose between conflicting sides, or (b) get permission from both sides to remain after advising them of the conflict.

Trying to turn this into some silly algorithmic calculation is a fundamental misunderstanding of what conflict of interest is or even that most conflicts are not objectively valuable terms that can be resolved numerically.

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

#56

Post by jacquesm »

H8crilA wrote: post #45
jacquesm wrote: post #30

Earlier quoted context omitted.

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.

That would work if it ended in pockets where it can do some good. Having it end up with WeWork is the same as tossing it into an outdoor furnace.

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

#57

Post by gamblor956 »

dheera wrote: post #52
alasdair_ wrote: post #46

Earlier quoted context omitted.

>Conflict-of-interest is a human-invented notion Literally every legal concept is a human-invented notion.

Sure, but to me, ALL human-invented notions are subject to interpretation and change over the times. We had kingdoms, slaves, and eye-for-eye punishment before and we largely don't have those concepts today in the developed world. The same is true for conflict-of-interest, fiduciary duty, and today's version of capitalism. If I had said "we don't need slaves" 400 years ago, I would have been downvoted like crazy. And…

If I had said "we don't need slaves" 400 years ago, I would have been downvoted like crazy.

European countries began banning the slave trade in the 1400s...

And here I am, saying conflict-of-interest and fiduciary duty will be antiquated ideas, and I'm being downvoted here today

The first will never be an antiquated idea as long as conflicting interests exist. Conflicting interests don't need to be hostile to each other, they just need to be conflicting in the sense that their interests do not align. As I stated earlier, conflict-of-interest rules merely act to either prevent the conflict or require both sides to knowingly waive the conflict in their shared agent.

Fiduciary duty governs the heart of professional workers. It binds lawyers, accountants, etc., to the interests of their clients. This concept will continue to exist as long as their are professions and as long as professionals can have multiple clients.

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

#58

Post by wolco »

dheera wrote: post #52
alasdair_ wrote: post #46

Earlier quoted context omitted.

>Conflict-of-interest is a human-invented notion Literally every legal concept is a human-invented notion.

Sure, but to me, ALL human-invented notions are subject to interpretation and change over the times. We had kingdoms, slaves, and eye-for-eye punishment before and we largely don't have those concepts today in the developed world. The same is true for conflict-of-interest, fiduciary duty, and today's version of capitalism. If I had said "we don't need slaves" 400 years ago, I would have been downvoted like crazy. And…

If you play games against yourself you will get better. No mystery playing vs others exposes new game plays.

Morals change with time.

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

#59

Post by code4tee »

dreamcompiler wrote: post #51
eldavido wrote: post #35

Earlier quoted context omitted.

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…

They were basically insolvent when the extra Softbank cash failed and the IPO failed. And that was before COVID-19. But you make a good point: They owe so much in leases they have huge negotiating power, and with COVID-19 they probably have even more since nobody's renting space right now.

Having a lease is not the same as “owing the bank money” to go with the loan analogy. Yes it’s painful for landlords but the landlords have options. If they kicked WeWork out they’re not just out the money in the way a bank is if a borrower defaults. There’s some short term pain but if WeWork has long leases at some point it benefits the landlords to just kick them out and move on.

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

#60

Post by csmiles »

DamnYuppie wrote: post #44
JumpCrisscross wrote: post #19

Earlier quoted context omitted.

> 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.

I think the parent is referring to “Commercial Real Estate” generally, not CBRE the firm.

Though as an aside, CBRE is launching its own co-working arm named “Hana.”

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