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SoftBank Backs Away from Part of Planned WeWork Bailout

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Re: SoftBank Backs Away from Part of Planned WeWork Bailout

#31

Post by jnwatson »

aerosmile wrote: post #25
gamesetmath wrote: post #12

Good. Let that PoS burn.

It's one thing to be mad at the founder, directors and officers. It's another thing to take away a very useful tool from the startup toolkit that millions of people find very helpful when starting a company. Having experienced the process of renting and furnishing a 2-4 person office before and after the rise of WeWork, I, for one, hope that they will stick around.

Executive suites have been around for at least 30 years. Other than the startup sheen, they offer little new.

Re: SoftBank Backs Away from Part of Planned WeWork Bailout

#32

Post by jazzkingrt »

Great timing! Current conditions are WeWork's nightmare scenario.

WeWork's raison-d'etre is short term leasing. Leaseholders will end those leases if everyone is working from home. Add to that that an economic recession was always going to be the real test of WeWork's ability to keep up with its huge long-term leases.

Re: SoftBank Backs Away from Part of Planned WeWork Bailout

#33

Post by iab »

Lazare wrote: post #24
TheFiend7 wrote: post #16

Earlier quoted context omitted.

Forgive my ignorance, but why is WeWork a PoS? I don't have much awareness on the situation.

It's a long story, but: First, sometimes people build (or buy) office buildings, and then lease the space in them to companies. Office buildings (and the land they're built on) tend to be very expensive, so landlords tend to be levered (ie, they borrow money to build/buy them), and they like to sign long term leases to try and lock in revenue so they know they can cover their loan payments. Companies like flexibility…

Love this summary

Re: SoftBank Backs Away from Part of Planned WeWork Bailout

#34

Post by x0x0 »

gxqoz wrote: post #18
nostromo wrote: post #9

> A notice sent to WeWork shareholders Tuesday said that SoftBank believes regulatory probes into the startup’s business [...] give it an out under the deal struck last fall to purchase $3 billion of WeWork shares from existing investors. > That will include Adam Neumann, former chief executive of WeWork parent We Co., who had the right to sell up to $970 million in stock as part of the October deal that led to his o…

I'm having a hard time following these two paragraphs. Is it saying that SoftBank invested $3 billion into WeWork which, among other things, funded Neumann's $970 million exit? And they now think they can recover that $3 billion and then deprive Neumann of at least some of that $970 million?

Softbank invested $1.5b, loaned up to $5b, and agreed to purchase $3b from existing shareholders. The last is apparently being... renogotiated.

Re: SoftBank Backs Away from Part of Planned WeWork Bailout

#35

Post by anonymouswacker »

robertkrahn01 wrote: post #10

I really liked the "WeCrashed" podcast [1,2], it traces the rise and fall of WeWork and is well produced. [1] https://podcasts.apple.com/podcast/wecrashed-the-rise-and-fa... [2] https://wondery.com/shows/we-crashed/

It is definitely worth a listen. Short episodes and very good story.

Re: SoftBank Backs Away from Part of Planned WeWork Bailout

#37

Post by sjtgraham »

jazzkingrt wrote: post #32

Great timing! Current conditions are WeWork's nightmare scenario. WeWork's raison-d'etre is short term leasing. Leaseholders will end those leases if everyone is working from home. Add to that that an economic recession was always going to be the real test of WeWork's ability to keep up with its huge long-term leases.

Arguably it's in the interest of the landlords to make this work. If WeWork goes under there will be a ton of void commercial space. It's a question of how many lease payments to forgive before it makes sense (and is actually viable) to repossess the buildings and replacement tenants.

Re: SoftBank Backs Away from Part of Planned WeWork Bailout

#39

Post by ablekh »

Lazare wrote: post #24
TheFiend7 wrote: post #16

Earlier quoted context omitted.

Forgive my ignorance, but why is WeWork a PoS? I don't have much awareness on the situation.

It's a long story, but: First, sometimes people build (or buy) office buildings, and then lease the space in them to companies. Office buildings (and the land they're built on) tend to be very expensive, so landlords tend to be levered (ie, they borrow money to build/buy them), and they like to sign long term leases to try and lock in revenue so they know they can cover their loan payments. Companies like flexibility…

Excellent summary!

Re: SoftBank Backs Away from Part of Planned WeWork Bailout

#40

Post by kevin_thibedeau »

gbronner wrote: post #30

This one is sure to wind up in Matt Levine's column tomorrow. The current owners of a large chunk of WeWork stock are going to have to sue Softbank to force them to complete the deal. For all we know, Softbank is experiencing liquidity problems, and would rather welsh on their portfolio company principals than endanger their own investors. I'm curious what Adam will finally get after all of this, other than an incred…

He still has a wave pool.
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