SoftBank to take control of WeWork: Sources • Hacker News Board

Re: SoftBank to take control of WeWork: Sources

#181

Post by anm89 » Tue, Oct 22, 2019, 3:55 PM UTC

dodobirdlord wrote: post #165

anm89 wrote: post #49

Serious question: given the monstrous scale of softbank, the not so great quality of many of its holdings, and it's ties into multiple world economies, could softbank be a systemic risk to the entire world economy? If Uber took a big write off at this point, not only would American and Japanese companies and Saudi Arabia take major losses but I would imagine big tech stocks in general would start to see a loss in con…

> I would imagine big tech stocks in general would start to see a loss in confidence and a reversion to more normal P/E ratios. Most of the big tech companies have not particularly strange P/E ratios. > I would imagine at that point softbank would be such a dirty word that it would have to firesale as well. What's the mechanism here? Uber takes a large writedown leads to Softbank declaring bankruptcy? I don't follow…

If two of softbanks biggest assets get marked down significantly, and the rest of their bets are similarly, super leveraged high risk plays, It's not hard for me to imagine trying to liquidate some assets so they could leave with their shirts and give (some) money back to investors.

They've probably missed their window for huge VC style growth at that point anyway.

Re: SoftBank to take control of WeWork: Sources

#182

Post by rattray » Tue, Oct 22, 2019, 5:20 PM UTC

cookie_monsta wrote: post #121

rattray wrote: post #75

Earlier quoted context omitted.

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?

I bet that he regrets doing business with Softbank, yes.

An anecdote I heard (unsure if true) was that Softbank had strongly encouraged Adam to focus on growth at the expense of profitability to a much higher degree, shooting for the stars much more than he otherwise would have done.

If I was Icharus and someone else had given me wings and told me fly much higher, I'd have myself to blame but I'd still be upset and filled with regret.

Re: SoftBank to take control of WeWork: Sources

#183

Post by luckydata » Tue, Oct 22, 2019, 5:58 PM UTC

ztratar wrote: post #151

luckydata wrote: post #142

Earlier quoted context omitted.

after a few years in silicon valley I learned that's essentially the right way to make it here. Building successful companies is for suckers, you just make a big ball of excrements, package it real well and then hand it to someone else before it falls apart. The VC system rewards that more than any other skillset.

WeWork is not a Silicon Valley company.

It is in all the ways that matter.

Re: SoftBank to take control of WeWork: Sources

#184

Post by perl4ever » Tue, Oct 22, 2019, 11:10 PM UTC

Nadge wrote: post #163

perl4ever wrote: post #115

Earlier quoted context omitted.

Reminds me of Bill Ackman and General Growth Properties.

In what way, please? I only know about Ackman through his Don Quixote-esque battle with Herbalife. What happened with GGP?

I only had the general impression in passing that GGP was his big success that gave him the resources to engage the more recent nonsense. I first heard of him in connection with Valeant more than Herbalife.

It's like, maybe the order in which you have your life experiences is everything.

Re: SoftBank to take control of WeWork: Sources

#185

Post by perl4ever » Wed, Oct 23, 2019, 12:27 AM UTC

buboard wrote: post #57

falcor84 wrote: post #29

Earlier quoted context omitted.

That's a false dichotomy. Is Amazon a retail company?

amazon is in the tech of retail - and more. what tech does wework make?

Amazon didn't start out with AWS. That's a side effect at becoming a world-conqueror in terms of logistics.

Re: SoftBank to take control of WeWork: Sources

#186

Post by dodobirdlord » Thu, Oct 24, 2019, 4:09 AM UTC

ksec wrote: post #179

dodobirdlord wrote: post #162

Earlier quoted context omitted.

They could probably sue him. As a member of the board of directors he still has an obligation to act in the interests of the shareholders even if he controls a majority of the votes.

Wow, so it turns there is a difference between Majority of shares (50%+) and Majority of Voting Power. So hypnotically could he have done it if he had 50%+ vote? Or could he still be sued? And by watching everything burn, I mean he could try to spin it as he will take drastic action to improve on the situation and refuse Softbank's offer.

> So hypnotically could he have done it if he had 50%+ vote? Or could he still be sued?

Could still be sued.

> And by watching everything burn, I mean he could try to spin it as he will take drastic action to improve on the situation and refuse Softbank's offer.

Having a spin can help in court, but a court is likely to see through it.

Re: SoftBank to take control of WeWork: Sources

#187

Post by ztratar » Sun, Oct 27, 2019, 10:56 PM UTC

luckydata wrote: post #183

ztratar wrote: post #151

Earlier quoted context omitted.

WeWork is not a Silicon Valley company.

It is in all the ways that matter.

Incorrect. It is not in all the ways that matter. Have you been to SV recently?

Re: SoftBank to take control of WeWork: Sources

#188

Post by Breza » Mon, Oct 28, 2019, 9:06 PM UTC

jimmywanger wrote: post #157

rtpg wrote: post #156

Earlier quoted context omitted.

I am not a fan of the WeWork business and would bet on its failure, but I don't think that one can just say that "this company is $5 billion, so this is the cap of how big such a company in this market can become." Just as a thought experiment, imagine that Regus ended up just straight out getting all of WeWork's assets in some sort of liquidation, and half the tenants stayed. They would get bigger! There is a possib…

Perhaps I was not precise in my wording. With the way WeWork currently works, and its asset allocation and fee structure, I don't think expansion or more market cap than Regus is possible. If WeWork get all Regus assets for free and half their business, sure, why not? That would be an immediate 3-4 billion dollar injection. As it currently stands, their coolness(tm) is not enough to compensate for their bloated fees…

I agree with you. WeWork doesn't have strong network effects and the business model is easy to copy. There are real estate companies that each owns tens of millions of square feet of office space. If WeWork really were worth $40 billion, the companies who own office buildings could just create their own coworking spaces and rake in the billions instead.