from Hacker News

SoftBank Backs Away from Part of Planned WeWork Bailout

by GuardLlama on 3/17/20, 9:21 PM with 63 comments

  • by jazzkingrt on 3/17/20, 11:55 PM

    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.

  • by robertkrahn01 on 3/17/20, 10:09 PM

    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/

  • by nostromo on 3/17/20, 10:02 PM

    > 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 ouster from the company’s board.

    Wow.

  • by gbronner on 3/17/20, 11:47 PM

    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 incredible ride.

  • by Animats on 3/17/20, 9:54 PM

    "The development won’t affect the $5 billion lifeline SoftBank agreed to give WeWork directly—cash the startup badly needed then as it ran out of runway, and which it is likely to continue to need as the worsening coronavirus outbreak empties out its desks."

    Er, yes. WeWork is dead until there is a COVID-19 vaccine. Tightly packing random people is out for now.

  • by streetcat1 on 3/17/20, 11:05 PM

    If it's not in your bank account, it does not exist.

  • by JumpCrisscross on 3/17/20, 10:26 PM

    > The development won’t affect the $5 billion lifeline SoftBank agreed to give WeWork directly—cash the startup badly needed then as it ran out of runway, and which it is likely to continue to need as the worsening coronavirus outbreak empties out its desks.

    Some of that money, including $1.5 billion in fresh equity, already has been invested.

    Still extending and pretending?

  • by pl0x on 3/18/20, 12:20 AM

    WeWork has been screwing members who try to leave out of their security deposit. Could this be why?

  • by neonate on 3/17/20, 10:11 PM

  • by sjtgraham on 3/18/20, 12:32 AM

    SoftBank is finished as a VC investor. You'd have to be an idiot or have no other option (adverse selection) to take their money.

  • by cnst on 3/17/20, 9:28 PM

    A non-paywall source: http://archive.is/uRXE6.

    This doesn't seem to have any effects for anyone other than investors; so, this is probably not really relevant for HN as there's hardly anything in the story for us to discuss.

  • by gamesetmath on 3/17/20, 10:12 PM

    Good. Let that PoS burn.

  • by buboard on 3/17/20, 10:30 PM

    but it's too big to fail

  • by zozimus on 3/17/20, 9:51 PM

    Thanks for your helpfulness, and many people other than investors will also read this as well