WeWork sues SoftBank over canceled $3B tender offer • Hacker News Board

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

#121

Post by gnicholas » Wed, Apr 08, 2020, 6:22 AM UTC

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…

> but it doesn’t say something like “SoftBank can cancel the tender if lots of customers cancel their WeWork memberships.”

There's a squishy clause called a "material adverse effect" clause that exists in many corporate contracts, and often has precious little specificity/definition. If I had to guess (as a former lawyer), I'd speculate that an MAE clause is at least part of the justification for SoftBank's pullout.

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

#122

Post by smcl » Wed, Apr 08, 2020, 6:24 AM UTC

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 don’t know why you’re getting downvoted. While I do not think this is the main source of risk (their insane burn, and losing N weeks of income from tenants who cancel are much more concerning) there is a very real possibility that many companies who were resistant to allowing work-from-home are now more comfortable with the idea and could consider it as an option to when they outgrow any office space in future.

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

#123

Post by LatteLazy » Wed, Apr 08, 2020, 9:49 AM UTC

jzl wrote: post #118

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...

The market doesn't demand that a monolithic entity like WeWork exist in order for co-working spaces to exist. Read up on WeWork's history and what happened with the Vision Fund investment. The only reason there are so many WeWorks is because they were given so much money that they didn't know what to do with it. And look what happened to that investment.

I don't think we will ever know the full tide of BS that was the WeWork/vision fund relationship. It suits both sides to not be forthcoming.

That said, I know people who use multiple WeWork locations in the same city depending on where they are for client meetings. Plus many other similar office space companies were not as flexible as WeWork (rent an office, it has to have walls, no you can't just get one desk in an open area). And some people really like the "atmosphere".

So who knows?

Personally, I think the reason we have a market is to get these decisions right. I'm aware my own views on the subject represent about 0.000000001% of humanity. So I may dislike WeWork but that doesn't mean they won't double in size and show a huge profit. Or I may love them but that doesn't mean its not a giant ponzi scheme.

Its important I do not to get attached to my own opinions as they're so often wrong :D

Again, just more random musings from me.

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

#124

Post by keanzu » Wed, Apr 08, 2020, 5:26 PM UTC

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.

WeWorkFromHome is going to kill WeWork