Business UK

WeGiveIn: SoftBank to the rescue

Breaking from CNBC:

SoftBank will take control of embattled work space company WeWork, according to people familiar with the matter.

SoftBank, led by Japanese billionaire Masayoshi Son, plans to spend somewhere between $4 billion and $5 billion on new equity and existing shares, sources say. Most of the purchases, sources told CNBC, will be in new equity.

The deal will value WeWork between $7.5 billion to $8 billion and could be announced as soon as Tuesday. It is SoftBank itself taking control, not the start-up focused Vision Fund. After the move, SoftBank would then have as much as 70% or more control of WeWork.

If true, it will bring the total amount of capital invested in the We Company, née WeWork, to between $16.8bn and $17.8bn. All for a valuation of $7.5bn to $8bn. Nice one guys.

There are plenty of lessons to be learned from the We debacle. A few being: don’t invest in a chief executive who takes conference calls from a hot tub, smokes weed and has an intense relationship with the number 18.

But here’s one for SoftBank, if you want to invest in a hot co-working space which leverages the growth potential of the entrepreneur economy, perhaps just pick a company where freelancers already congregate en masse.

Namely Starbucks.

Since SoftBank’s first investment in WeWork, back in August 2017, the Seattle coffee company’s shares are up 57.19 per cent, according to S&P Capital IQ. Without doubt, Masa Son would take such a return on his capital right now.

Related Links:
WeWork Founder Mixed Spiritual Group With Business – WSJ

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