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WeWork sues SoftBank over canceled $3B tender offer

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Re: WeWork sues SoftBank over canceled $3B tender offer

#71

Post by H8crilA »

jacquesm wrote: post #67
H8crilA wrote: post #66

Earlier quoted context omitted.

My point is there's no point in making "good use" of this money against the backdrop of what's currently happening. It's a symbol, at best.

Of course there is. The backdrop is like the weather. In the meantime you could fund a lot of start-ups from that money. Now, arguably, SoftBanks' history is less than stellar but still, the chances of them doing something good with that cash strongly outweigh the chances of WeWork doing something good with that cash. That still leaves your point about the rest of the trillions that have been printed but that is anot…

Every cycle, since the invention of money, it's the same thing over and over again - not understanding that it's the demand (investors) that causes problems, not the supply (investments). Demand creates supply. Supply does not create demand. It's like blaming oil wells or oil companies for global warming, instead of the people that buy and burn oil (aka everyone). That is what I meant by "don't expect you to understand", because it seems people never do.

Re: WeWork sues SoftBank over canceled $3B tender offer

#72

Post by worik »

tomp wrote: post #32
code4tee wrote: post #5

Quote: WeWork’s board said that it “regrets the fact that SoftBank continues to put its own interests ahead of those of WeWork’s minority stockholders.” Of course they’re going do to that, it’s called fiduciary duty to their own stakeholders! Such diligence is something WeWork’s board seemed to casually overlook for far too long. At this point why would SoftBank buy WeWork shares that are in all likelihood worth litt…

Not a good analogy. The house already pretty much burned down before SoftBank agreed to (second) round of investment.

No it had not.

I am a long way away but from what I can ell from he news I follow it has a good core business. It was run by a crook, who still has his hooks in, but the real estate business was sound.

Until all the income from short term leases evaporates due to curfews and the long term leases they pay keep ticking....

Re: WeWork sues SoftBank over canceled $3B tender offer

#73

Post by worik »

duxup wrote: post #69

I wonder after the mess of WeWork plays out: Who buys all those buildings / assets? There have to be some pretty good deals out there considering a collapse of WeWork / fire sale and the economy for someone who can manage some these assets.

They did not own the buildings.

Real estate in big cities is (generally speaking) quite a closed shop. They had leases.

Re: WeWork sues SoftBank over canceled $3B tender offer

#74

Post by koolba »

tonyhb wrote: post #20
toomuchtodo wrote: post #9

Earlier quoted context omitted.

SoftBank just has to wait for WeWork to exhaust its cash reserves. It's clear SoftBank will take whatever steps are necessary for the deal to close and them light another $3B on fire. From a paywall FT article [1] quoted in Matt Levin's piece ("WeWon't") on this: > "Thousands of WeWork tenants have refused to pay rent or sought to terminate their leases over the past month, heaping pressure on the lossmaking group as…

Ran through some numbers from their S1's and Harvard Business School's anaylsis. By mid Q3 they'll be out of cash at their current burn with no new money, given their 2020 obligations.

Does that factor in the insane increase in legal spending they’re going to have this year?

Re: WeWork sues SoftBank over canceled $3B tender offer

#75

Post by csours »

mronge wrote: post #68
csours wrote: post #27

Earlier quoted context omitted.

Quoting from Matt Levine: > That is a good little window into mergers-and-acquisitions lawyering. SoftBank’s agreement with WeWork isn’t public, but presumably it says something like “SoftBank can cancel the tender if there are any material government restrictions on WeWork’s business,” but it doesn’t say something like “SoftBank can cancel the tender if lots of customers cancel their WeWork memberships.” The very ro…

That's true but they may be able to cancel the contract based on a force majeure clause because of the global pandemic.

As Frere Jacques notes, it is almost pointless to speculate without the actual contract in hand.

For instance, large events often have cancellation insurance, but they have found that the terms are much narrower than they expected when they signed the insurance contract.

Re: WeWork sues SoftBank over canceled $3B tender offer

#76

Post by hkmurakami »

duxup wrote: post #69

I wonder after the mess of WeWork plays out: Who buys all those buildings / assets? There have to be some pretty good deals out there considering a collapse of WeWork / fire sale and the economy for someone who can manage some these assets.

How many buildings do they actually own outright given that most of their offices are long term leases?

The buildings that they do own are surely heavily mortgaged, which means that the lender will attempt to foreclose on it if payments are not made. WeWork itself could try to preemptively unload it. There's standard processes for properties with trust deeds attached to them.

Re: WeWork sues SoftBank over canceled $3B tender offer

#77

Post by hkmurakami »

worik wrote: post #73
duxup wrote: post #69

I wonder after the mess of WeWork plays out: Who buys all those buildings / assets? There have to be some pretty good deals out there considering a collapse of WeWork / fire sale and the economy for someone who can manage some these assets.

They did not own the buildings. Real estate in big cities is (generally speaking) quite a closed shop. They had leases.

They did buy some small number of buildings

https://therealdeal.com/2019/11/01/weworks-white-elephant-in...

Re: WeWork sues SoftBank over canceled $3B tender offer

#78

Post by LatteLazy »

Pure opinion:

On the one hand, they're a real estate company masquerading as a tech company (and getting the funding and valuation unicorns would hope for), and with Coronavirus they have a serious cashflow problem.

On the other hand, there will be a burst of people (re)starting small businesses and wanting space on a flexible basis in a few months time...

Re: WeWork sues SoftBank over canceled $3B tender offer

#79

Post by hkmurakami »

chrisjc wrote: post #31

I understand that the initial funding was provided through the vision fund, and second round funding through the vision fund was shot down by vision fund members. As as a result, the second round funding was going to be provided by Softbank themselves... Is this news about that second round funding by Softbank?

this is the buyout of individual shareholders.
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