After WeWork, SoftBank’s Startup Bookkeeping Draws Scrutiny • Hacker News Board

Re: After WeWork, SoftBank’s Startup Bookkeeping Draws Scrutiny

#71

Post by rifta » Thu, Nov 28, 2019, 6:17 PM UTC

reaperducer wrote: post #54

papito wrote: post #17

Earlier quoted context omitted.

Thankfully the regulations saved the public before WeWork could enter the stock exchanges. As long as it stays this way, I really don't care if Saudi Arabia sinks billions of dollars into a turkey like I will sink my teeth into one tonight.

The risk is that suddenly all tech investors will want to know what's going on with all of the companies they invested in, and demand actual returns and not pixie dust and double talk. Can you imagine if the SV bubble was held to the same expectations as real world companies? Half of the Bay Area would curl up and blow away overnight.

>Half of the Bay Area would curl up and blow away overnight.

So your suggesting that only 50% of the Bay is BS?

Re: After WeWork, SoftBank’s Startup Bookkeeping Draws Scrutiny

#72

Post by rchaud » Thu, Nov 28, 2019, 6:21 PM UTC

FBISurveillance wrote: post #5

carrozo wrote: post #3

When SoftBank buys shares in a startup and then invests again at a higher valuation, Son says he has made a profit. That is legal under accounting standards, but SoftBank receives no money. The only change is that SoftBank has boosted the value of its original stake from, say, $1 billion to $2 billion by raising the value of the startup. In SoftBank’s income statements and return calculations, at least some of the ad…

Never gets old: https://signalvnoise.com/posts/1941-press-release-37signals-...

> We’re excited to roll out a list of unconfirmed revenue possibilities that involve crowdsourcing, a robust set of widget creation tools, 3G, augmented reality, social stuff, and an app store.

They joke, but WW were literally doing exactly this, updated for 2019 of course. A bunch of ill defined tech projects with no real link to their core business.

Re: After WeWork, SoftBank’s Startup Bookkeeping Draws Scrutiny

#73

Post by Barrin92 » Thu, Nov 28, 2019, 6:22 PM UTC

Traster wrote: post #8

The more I hear about this the more it looks like this entire scheme has turned into a pyramid scheme. Pouring more money into investments to try and boost the valuation. Using previous investments to invest and boost the value of new investments, guaranteeing massive loans in order to get others to invest at huge valuations. It just looks more and more like laundering money through all sorts of different mechanisms…

Agreed, and I also found it extremely hilarious that Softbank styled itself as the "300-year company", but their biggest investments are ridesharing companies, a real estate subleasing company, several eCommerce stores and so on.

I mean, if you're going all-in on the future where is the biotech, pharmacology and the robots? It's not just softbank that to me looks fishy, the entire industry looks like it has drunk its own kool-aid.

Re: After WeWork, SoftBank’s Startup Bookkeeping Draws Scrutiny

#74

Post by ska » Thu, Nov 28, 2019, 6:22 PM UTC

andrewprock wrote: post #64

bhouston wrote: post #57

Earlier quoted context omitted.

Was earn.com acquired at a higher than fair valuation? If so the shareholders of coinbase.com should sue.

It's possible it was "sold at a loss" but the early investors made money. e.g. by investment round: A: $1m for a $10m valuation B: $5m for a $40m valuation C: $12m for a $100m valuation A "fire sale" of $15m would yield a profit for Series A investors, a probable loss for B, and a certain loss for C.

Or if they were already in financial trouble and C came in with 1.x liquidation preference, they get everything (or near it)

Re: After WeWork, SoftBank’s Startup Bookkeeping Draws Scrutiny

#75

Post by [deleted] » Thu, Nov 28, 2019, 6:22 PM UTC

bhouston wrote: post #57

Alex3917 wrote: post #48

Earlier quoted context omitted.

> Pouring more money into investments to try and boost the valuation. Using previous investments to invest and boost the value of new investments, guaranteeing massive loans in order to get others to invest at huge valuations. It just looks more and more like laundering money through all sorts of different mechanisms to create paper gains that don't reflect reality. Is this uncommon? E.g. I don't have any inside info…

Was earn.com acquired at a higher than fair valuation? If so the shareholders of coinbase.com should sue.

[deleted]

Re: After WeWork, SoftBank’s Startup Bookkeeping Draws Scrutiny

#76

Post by [deleted] » Thu, Nov 28, 2019, 6:23 PM UTC

bhouston wrote: post #57

Alex3917 wrote: post #48

Earlier quoted context omitted.

> Pouring more money into investments to try and boost the valuation. Using previous investments to invest and boost the value of new investments, guaranteeing massive loans in order to get others to invest at huge valuations. It just looks more and more like laundering money through all sorts of different mechanisms to create paper gains that don't reflect reality. Is this uncommon? E.g. I don't have any inside info…

Was earn.com acquired at a higher than fair valuation? If so the shareholders of coinbase.com should sue.

[deleted]

Re: After WeWork, SoftBank’s Startup Bookkeeping Draws Scrutiny

#77

Post by rifta » Thu, Nov 28, 2019, 6:28 PM UTC

code4tee wrote: post #39

There are a lot of VC backed companies that are likely very upside down. You know the types with tons of money raised with very little revenue and little to no profit and an unclear vision on how the entity becomes a real business with a solid profit steam that justifies its valuation. The old model of “it doesn’t matter because we’ll always be able to offload this thing to others and cash out” is dead now. What we’r…

Let's hope this correction is a bit smoother than the last.

Re: After WeWork, SoftBank’s Startup Bookkeeping Draws Scrutiny

#78

Post by rifta » Thu, Nov 28, 2019, 6:34 PM UTC

neffy wrote: post #52

TaylorSwift wrote: post #19

Earlier quoted context omitted.

I want to point out that a lot of these valuations are signed off by well-known accounting firms, valuation firms, and consulting firms. If it's really one big conspiracy to prop up valuations via recent financing, loans, or market comparables, then wouldn't one of these parties call it out (well, inherently a lot of these are paid by organizations to do their valuations, so true independence is a question here). Add…

The Financial Times has been calling SoftBank out for over a year now. Detailed accounting analyses, pointing out very basic issues and warning flags. This is why the WeWork IPO had to be pulled in the first place. Every major crash is preceded by several years of this. Financial manipulation is the art of getting everybody confused between stocks and flows. As long as the flow continues, the employees of SoftBank ge…

>and then, one day, the music stops, and there aren't any chairs to sit on, at all...

What would the signs be, sights seen or sounds heard just before the music stops?

Re: After WeWork, SoftBank’s Startup Bookkeeping Draws Scrutiny

#79

Post by [deleted] » Thu, Nov 28, 2019, 6:37 PM UTC

meddlepal wrote: post #56

reaperducer wrote: post #54

Earlier quoted context omitted.

The risk is that suddenly all tech investors will want to know what's going on with all of the companies they invested in, and demand actual returns and not pixie dust and double talk. Can you imagine if the SV bubble was held to the same expectations as real world companies? Half of the Bay Area would curl up and blow away overnight.

You say that like it's a bad thing. Sometimes things need to fail and fail hard so everything can get better in the long run.

[deleted]

Re: After WeWork, SoftBank’s Startup Bookkeeping Draws Scrutiny

#80

Post by Andromeda88 » Thu, Nov 28, 2019, 6:38 PM UTC

Traster wrote: post #8

The more I hear about this the more it looks like this entire scheme has turned into a pyramid scheme. Pouring more money into investments to try and boost the valuation. Using previous investments to invest and boost the value of new investments, guaranteeing massive loans in order to get others to invest at huge valuations. It just looks more and more like laundering money through all sorts of different mechanisms…

Check YzerGroup for a real "money laundering".

They started with YzerProperty(2014 or so). Then YzerMotors (2016). Now YzerChat. These startups all involves billionaires from Dubai. Btw YzerProperty and Motors do not exist anymore.