/r/wallstreetbets
SoftBank Plans $5B Rescue Financing for WeWork
11–17 of 17 posts
Re: SoftBank Plans $5B Rescue Financing for WeWork
#12I mean... Masayoshi Son must be one of the worst investors in history, at least in terms of absolute losses. That guy loses more money than anyone. Lost 70B during the dot com crash. Writing down billions in 2019 on Uber and WeWork. I know a few folks that worked at other companies he/Vision Fund invested in. One received $200M and they had no idea what to do with it. They spent it on headcount, which isn't the smart…
What I find most fascinating about it all is that it makes absolutely no rational sense when looking at it from a financial/investor perspective. It only starts making a lot of sense when you look at it from a far different perspective, a longer term strategic motivation that has very little to do with investment and returns or financial prudence, any more than those are on the mind of any military.
Re: SoftBank Plans $5B Rescue Financing for WeWork
#13Earlier quoted context omitted.
Possibly, but there is another angle here. WeWork isn’t really a tech or realestate company, but a financial instrument to be propped up and then dumped into the lap of late investors or the market, so that early investors can run away with a nice profit. The IPO attempt failed. Now they need time for people to forget, so the financial instrument can be repackaged and sold to some gullible private investors a bit lat…
I can't see that happening with all this prior history and bad press. But as they say the market is full of suckers.
People have very short memories. Sketchy debt sausages of the sort that helped cause the 2008 crash are a big thing again.
Re: SoftBank Plans $5B Rescue Financing for WeWork
#14Earlier quoted context omitted.
Possibly, but there is another angle here. WeWork isn’t really a tech or realestate company, but a financial instrument to be propped up and then dumped into the lap of late investors or the market, so that early investors can run away with a nice profit. The IPO attempt failed. Now they need time for people to forget, so the financial instrument can be repackaged and sold to some gullible private investors a bit lat…
Except that some percentage of their investment is at a $47B valuation. They already bought quite a bit of early investors/employees of positions who cashed out happily. I think this really is about loss mitigation than anything else. They're already $10B in - spending another $5 to get $10B out vs <$1B out if they go bankrupt is probably worth it.
So basically a dollar auction [1] on a billion dollar scale?
Re: SoftBank Plans $5B Rescue Financing for WeWork
#15This is just nuts. Wasting tens of billions of dollars. More and more the vision fund looks Saudi’s vehicle to throw money away. There must be some underlying reason why they are ok with wasting this much money. I bet the billions wasted on WeWork, would have lifted hundreds of millions of people out of poverty
Re: SoftBank Plans $5B Rescue Financing for WeWork
#16When someone searches for a "Sunk cost fallacy" description in the following years, this will be the example everyone will use.
Possibly, but there is another angle here. WeWork isn’t really a tech or realestate company, but a financial instrument to be propped up and then dumped into the lap of late investors or the market, so that early investors can run away with a nice profit. The IPO attempt failed. Now they need time for people to forget, so the financial instrument can be repackaged and sold to some gullible private investors a bit lat…
Enriching early investors at the expense of the later ones, is how pyramid schemes work, as well.
Re: SoftBank Plans $5B Rescue Financing for WeWork
#17This is just nuts. Wasting tens of billions of dollars. More and more the vision fund looks Saudi’s vehicle to throw money away. There must be some underlying reason why they are ok with wasting this much money. I bet the billions wasted on WeWork, would have lifted hundreds of millions of people out of poverty
Apparently Masa promised a 1 trillion dollar gift. Maybe they still have hope. Link to interview: https://www.valuewalk.com/2019/03/masayoshi-son-trillion-dol...