
SoftBank Plans $5B Rescue Financing for WeWork - dr_robert
https://www.bloomberg.com/news/articles/2019-10-16/softbank-said-to-plan-5-billion-rescue-financing-for-wework
======
eric_b
I mean... Masayoshi Son must be one of the worst investors in history, at
least in terms of absolute losses. That guy loses more money than anyone.

Lost 70B during the dot com crash. Writing down billions in 2019 on Uber and
WeWork. I know a few folks that worked at other companies he/Vision Fund
invested in. One received $200M and they had no idea what to do with it. They
spent it on headcount, which isn't the smartest when you don't know what
direction to go. That investment will never see a positive return.

Anyways, other than Alibaba, does Masa have any other big wins?

~~~
rockinghigh
Yes, he also made money on Yahoo! and SoftBank.

------
dmode
This is just nuts. Wasting tens of billions of dollars. More and more the
vision fund looks Saudi’s vehicle to throw money away. There must be some
underlying reason why they are ok with wasting this much money. I bet the
billions wasted on WeWork, would have lifted hundreds of millions of people
out of poverty

~~~
chrisked
Apparently Masa promised a 1 trillion dollar gift. Maybe they still have hope.
Link to interview: [https://www.valuewalk.com/2019/03/masayoshi-son-trillion-
dol...](https://www.valuewalk.com/2019/03/masayoshi-son-trillion-dollar-gift/)

------
dangerboysteve
When someone searches for a "Sunk cost fallacy" description in the following
years, this will be the example everyone will use.

~~~
adzicg
Possibly, but there is another angle here. WeWork isn’t really a tech or
realestate company, but a financial instrument to be propped up and then
dumped into the lap of late investors or the market, so that early investors
can run away with a nice profit. The IPO attempt failed. Now they need time
for people to forget, so the financial instrument can be repackaged and sold
to some gullible private investors a bit later. SoftBank will get new shares
significantly cheaper than the older ones, and as long as they can keep the
patient on life support long enough for someone else to believe in it, the
whole game will pay off nicely. Probably a few years though, waiting for the
next wave.

~~~
smachiz
Except that some percentage of their investment is at a $47B valuation.

They already bought quite a bit of early investors/employees of positions who
cashed out happily.

I think this really is about loss mitigation than anything else.

They're already $10B in - spending another $5 to get $10B out vs <$1B out if
they go bankrupt is probably worth it.

~~~
dmitrygr
So basically a dollar auction [1] on a billion dollar scale?

[1]
[https://en.wikipedia.org/wiki/Dollar_auction](https://en.wikipedia.org/wiki/Dollar_auction)

------
docdeek
If there's one thing to throw after bad money it's good money...

------
undefined3840
/r/wallstreetbets

------
OisinMoran
Would suggest taking the "Deals" out of the title here, it seems to be some
formatting issue.

~~~
dr_robert
Done, thanks!

