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SoftBank to take control of WeWork: Sources

cnbc.com

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Re: SoftBank to take control of WeWork: Sources

#121

Post by cookie_monsta »

rattray wrote: post #75
cookie_monsta wrote: post #73

I don't really get the ongoing obsession with We/Softbank. I kind of got the whole schadenfreude side of it when it all came tumbling down but now it's just turned into a story of a big company trying to dig itself out of a hole created by some dumb decisions it made. Is there some larger relevance that I'm missing?

For one thing, I'd argue it's important for startups to understand how Softbank behaves as an investor, since they are a fund many companies might consider taking money from. They have an outsize quantity of capital to invest, so this is more worth watching than other funds' behaviors might be.

Do you think that Neumann feels like he got a raw deal?

Re: SoftBank to take control of WeWork: Sources

#122

Post by ChuckMcM »

Wow, that might be a record, IPO to cramdown in 3 weeks. I wonder if Softbank sees some way to convert some of the real estate into assets that it can sell off before the next recession hits to get its money back. I could not find a single thing in that article that suggested anything other than a liquidation that might favor the investors over creditors.

Re: SoftBank to take control of WeWork: Sources

#123

Post by dfcowell »

perl4ever wrote: post #110
Traster wrote: post #12

It's very difficult to see how SoftBank breaks even on this new deal. They're investing $5bn now, with the hope that it's worth more than that when they IPO, but several things have killed that idea. Firstly, their brand is tarnished. Secondly, the growth play will be gone by the time they IPO. Thirdly, the charismatic leader is gone, so the message of "Disrupting" and "We're a tech play' is gone. They've put $5bn in…

What I read is that $5B is on top of their past investments of roughly $11B.

The $5b is coming from SoftBank Group. The earlier $11b came from the Vision Fund, which is a subsidiary with an entirely different operating environment.

Re: SoftBank to take control of WeWork: Sources

#124

Post by detail-oriented »

Traster wrote: post #12

It's very difficult to see how SoftBank breaks even on this new deal. They're investing $5bn now, with the hope that it's worth more than that when they IPO, but several things have killed that idea. Firstly, their brand is tarnished. Secondly, the growth play will be gone by the time they IPO. Thirdly, the charismatic leader is gone, so the message of "Disrupting" and "We're a tech play' is gone. They've put $5bn in…

The only idea i have is to turn it into a REIT.

Re: SoftBank to take control of WeWork: Sources

#125

Post by anm89 »

xenospn wrote: post #67
anm89 wrote: post #53

Earlier quoted context omitted.

Simple, someone gave them money at that valuation (softbank). It doesn't mean the underlying value exists but it does give them that "valuation"

Obviously - but why did Softbank think it was worth so much more? They were an investor - they knew that the company was a financial black hole.

People refer to this as the greater fool theory. Softbank never believed that valuation. What they believed was that there was someone dumber than them that they could trick into buying it from them leaving themselves with cash and the other person with the overvalued asset.

In this case it turned out they were the first and final fool and they were left holding their own bag.

And thus they essentially sacammed themselves(or really their investors) out of billions.

You'll also hear this referred to as a pump and dump. Pump up the value of some asset and then dump it on someone else.

Re: SoftBank to take control of WeWork: Sources

#126

Post by stjohnswarts »

philwelch wrote: post #97
Traster wrote: post #12

It's very difficult to see how SoftBank breaks even on this new deal. They're investing $5bn now, with the hope that it's worth more than that when they IPO, but several things have killed that idea. Firstly, their brand is tarnished. Secondly, the growth play will be gone by the time they IPO. Thirdly, the charismatic leader is gone, so the message of "Disrupting" and "We're a tech play' is gone. They've put $5bn in…

Rebranding can happen, and the “charismatic leader” was the #1 problem. The bull case for WeWork that I always heard was based on the existence of a WeWork-shaped market opportunity, and WeWork themselves being in pole position to take it. The bear case was that WeWork was run by crazy people. I think SoftBank’s decisions here are making the best of a bad situation.

I agree, with the loon no longer in the lead, they have a chance.

Re: SoftBank to take control of WeWork: Sources

#128

Post by JohnJamesRambo »

hn_throwaway_99 wrote: post #27
newfangle wrote: post #11

Earlier quoted context omitted.

4 to 5 billion investment in a company with an 8 billion dollar valuation. At some point you have to wonder when its better to cut your losses and scrap the entire thing.

Furthermore, according to https://craft.co/wework/funding-rounds , WeWork has already received $12 billion plus in equity investments (not counting debt raises). Softbank alone has already put in $9.4 billion in equity + $1 billion in debt. So it looks like they've already destroyed $4 billion+ in value. I'm curious how the more financially astute than I see this as anything besides throwing good money after bad?

It seems like they haven’t even read the Wikipedia for Sunk Cost Fallacy.

In case any SoftBank homies are reading this, here you go. You are investing in the Concorde.

https://en.wikipedia.org/wiki/Sunk_cost

Re: SoftBank to take control of WeWork: Sources

#129

Post by FireBeyond »

ceejayoz wrote: post #117
hilbertseries wrote: post #107

Earlier quoted context omitted.

We've currently never built a manned space ship for month long travels in outer space. We've never built a space ship that uses centrifugal force to simulate gravity and done longitudinal studies to verify that this doesn't have an adverse impact on Humans. SpaceX is has a market capitalization of 33.3 Billion. SpaceX which was founded 17 years ago has never had a manned flight. SpaceX has also never had a flight lea…

> SpaceX has also never had a flight leave the atmosphere so far. Uh, what?

I can only assume he meant a manned flight.
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