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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

#91

Post by TheOtherHobbes »

toomuchtodo wrote: post #88
code4tee wrote: post #59

Earlier quoted context omitted.

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.

Some landlords have mortgages to pay.

How many WW properties are still owned by Adam Neumann?

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

#92

Post by TheOtherHobbes »

LatteLazy wrote: post #78

Pure opinion: On the one hand, they're a real estate company masquerading as a tech company (and getting the funding and valuation unicorns would hope for), and with Coronavirus they have a serious cashflow problem. On the other hand, there will be a burst of people (re)starting small businesses and wanting space on a flexible basis in a few months time...

Which will - at best - still be much smaller than previous occupancy levels.

And those levels were barely enough to keep WW solvent, never mind profitable.

The only thing that might save WW would be an absolutely unprecedented boom in this sector. And that's really, really unlikely in the short term, and only slightly more likely - i.e. still not very - in the medium term.

And in the meantime, if WW dies there will be knock-on effects for office real estate in general, all the way up the food chain.

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

#95

Post by noodle »

thehappypm wrote: post #93

WeWork has an existential issue in that the entire workforce will emerge from this with at least 2 months of remote work experience. Many, many employers and individuals will realize that remote is OK, and in fact has a ton of benefits.

I dunno, I feel like this could swing either way. I'm a remote worker and I work out of a coworking space. If more people go remote, demand for coworking space could also increase.

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

#96

Post by [deleted] »

TheOtherHobbes wrote: post #91
toomuchtodo wrote: post #88

Earlier quoted context omitted.

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

Some landlords have mortgages to pay. How many WW properties are still owned by Adam Neumann?

[deleted]

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

#97

Post by freehunter »

noodle wrote: post #95
thehappypm wrote: post #93

WeWork has an existential issue in that the entire workforce will emerge from this with at least 2 months of remote work experience. Many, many employers and individuals will realize that remote is OK, and in fact has a ton of benefits.

I dunno, I feel like this could swing either way. I'm a remote worker and I work out of a coworking space. If more people go remote, demand for coworking space could also increase.

I'd agree with this take. I think some number of people will realize they don't like needing to go to the office every day but also can't feasibly work from inside their own house (kids, dogs, spotty wifi, loud neighbors, etc).

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

#98

Post by cmroanirgo »

csours wrote: post #27
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…

Quoting from Matt Levine: > That is a good little window into mergers-and-acquisitions lawyering. SoftBank’s agreement with WeWork isn’t public, but presumably it says something like “SoftBank can cancel the tender if there are any material government restrictions on WeWork’s business,” but it doesn’t say something like “SoftBank can cancel the tender if lots of customers cancel their WeWork memberships.” The very ro…

From the article:

> the co-working company and SoftBank agreed to a set of performance milestones that WeWork agreed to meet in exchange for the secondary liquidity. Such terms are customary in most financial transactions... SoftBank in its statement last week said that WeWork failed to meet a number of those performance requirements, and said that it was within its rights under the tender offer contract to walk away from the deal.

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

#100

Post by shard972 »

fasicle wrote: post #86
Mtinie wrote: post #50

Earlier quoted context omitted.

"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.

Even with the cramped open plan workspaces?
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