Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

WeWork sues SoftBank over canceled $3B tender offer

techcrunch.com

Post reply on HN
Print view View original

81–90 of 124 posts

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

#81

Post by eigenvalue »

JumpCrisscross wrote: post #6
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…

> 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.

In this case SoftBank could recuse its board members from any discussion of this matter, which would sidestep the problem. The SoftBank board's duty to SoftBank investors is much more important than any loss of control in WeWork that would stem from recusing itself.

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

#82

Post by jacquesm »

H8crilA wrote: post #71
jacquesm wrote: post #67

Earlier quoted context omitted.

Of course there is. The backdrop is like the weather. In the meantime you could fund a lot of start-ups from that money. Now, arguably, SoftBanks' history is less than stellar but still, the chances of them doing something good with that cash strongly outweigh the chances of WeWork doing something good with that cash. That still leaves your point about the rest of the trillions that have been printed but that is anot…

Every cycle, since the invention of money, it's the same thing over and over again - not understanding that it's the demand (investors) that causes problems, not the supply (investments). Demand creates supply. Supply does not create demand. It's like blaming oil wells or oil companies for global warming, instead of the people that buy and burn oil (aka everyone). That is what I meant by "don't expect you to understa…

> That is what I meant by "don't expect you to understand", because it seems people never do.

When that feeling hits you repeatedly maybe the problem is on your end. For instance, when you use supply and demand in the opposite way of what 'normal' people do then you are asking for not being understood.

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

#83

Post by LatteLazy »

dreamcompiler wrote: post #42
LatteLazy wrote: post #24

Earlier quoted context omitted.

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.

To extract any rubber at all, they will need to win. Given they have a binding agreement with Softbank (per the article), and they are willing to call in the lawyers, they must think they have a case...

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

#84

Post by blaser-waffle »

tmpz22 wrote: post #64
gullyfur wrote: post #15

Earlier quoted context omitted.

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

Anecdotally wework had a two month deposit from my former company which they are refusing to refund - my guess is 4 weeks until the civil suits start stacking up, 6 weeks until the executives bail out in Golden parachutes to cushy FANNG positions, and 8 weeks until low level employees are left holding the bag.

I agree with the basic timeline but suggest doubling the timeframe.

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

#85

Post by propinquity »

JumpCrisscross wrote: post #6
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…

> 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.

Wouldn't the responsibility be to the partners in Vision Fund rather than SoftBank's share holders?

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

#86

Post by fasicle »

Mtinie wrote: post #50
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…

"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 genera…

I know a lot of people, including myself, who have cancelled membership to WeWork due to Coronavirus.

I intend to join again when we're allowed to leave our houses.

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

#88

Post by toomuchtodo »

code4tee wrote: post #59
dreamcompiler wrote: post #51

Earlier quoted context omitted.

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.

Landlords have mortgages to pay. Bondholders hold those notes. There is very little slack in the system for this scale of default.

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

#89

Post by H8crilA »

jacquesm wrote: post #82
H8crilA wrote: post #71

Earlier quoted context omitted.

Every cycle, since the invention of money, it's the same thing over and over again - not understanding that it's the demand (investors) that causes problems, not the supply (investments). Demand creates supply. Supply does not create demand. It's like blaming oil wells or oil companies for global warming, instead of the people that buy and burn oil (aka everyone). That is what I meant by "don't expect you to understa…

> That is what I meant by "don't expect you to understand", because it seems people never do. When that feeling hits you repeatedly maybe the problem is on your end. For instance, when you use supply and demand in the opposite way of what 'normal' people do then you are asking for not being understood.

It's supply and demand of equity/prospectuses.

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

#90

Post by MrsPeaches »

LatteLazy wrote: post #83
dreamcompiler wrote: post #42

Earlier quoted context omitted.

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.

To extract any rubber at all, they will need to win. Given they have a binding agreement with Softbank (per the article), and they are willing to call in the lawyers, they must think they have a case...

Whilst IANAL, in my legal dealings I have been consistently surprised by how weak a case a desparate party is willing to bring to court.
Post reply on HN