
WeWork 'Accepts Takeover by Softbank' - marklabedz
https://www.bbc.com/news/business-50138354
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conroy
Dupe
[https://news.ycombinator.com/item?id=21323511](https://news.ycombinator.com/item?id=21323511)

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symmitchry
I can't understand how Adam Neumann continues to make such insane income from
all this. It's demoralizing.

~~~
daenz
It almost went to IPO too...what does that say about the kind of garbage that
can get pushed off onto the unwitting public so the original investors can
cash out?

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OnlineGladiator
Some people believe most of the VC industry is just a ponzi scheme, where you
try to find a greater fool until eventually the final fool is the public. Of
course by then all of the VC investors have made enormous returns on a company
that was clearly never that great to begin with.

I'm not saying I agree with this, but it's an interesting theory. It seems
pretty obvious that this sometimes happens, as evidenced by Softbank and
WeWork, the question is how pervasive is this mentality?

I guess I should probably attempt to answer my own question and analyze how
many VC firms hold onto stock after the company goes public, although that
will only provide data for late stage investors.

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daenz
Caveat emptor I suppose

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bogomipz
From the Wall Street Journal front page:

>"As part of the deal, SoftBank, which already owns about a third of the
company, is to buy nearly $1 billion of stock in WeWork’s parent from Mr.
Neumann, who was forced out as chief executive after pushback from prospective
investors scuttled the IPO. The Japanese conglomerate will also extend him
roughly $500 million in credit to help repay a loan facility of the same
amount led by JPMorgan, and also pay Mr. Neumann a $185 million consulting
fee, the people said."[1]

A $185 million dollar consulting fee?

To put some perspective on this level of greed:

All of this is on top of the $700 million that Adan Neumann cashed out back in
July ahead of the IPO announcement.[2]

The credit line not withstanding Adam Neumann now has $2 billion dollars in
cash in his pocket while WeWork's valuation is now $8 billion and in need of
emergency financing.

Adam Neumann has spent 90 million dollars on 6 properties 4 of them are in New
York, 2 of them are actually short walking distance from each other in
Manhattan.

[1] [https://www.wsj.com/articles/softbank-to-take-control-of-
wew...](https://www.wsj.com/articles/softbank-to-take-control-of-
wework-11571746483)

[2] [https://www.wsj.com/articles/wework-co-founder-has-cashed-
ou...](https://www.wsj.com/articles/wework-co-founder-has-cashed-out-at-
least-700-million-from-the-company-11563481395)

[3] [https://www.wsj.com/articles/wework-founder-adam-neumanns-
tr...](https://www.wsj.com/articles/wework-founder-adam-neumanns-trove-of-
pricey-properties-11570730254)

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blueyes
Softbank is the Long-Term Capital Management of our decade.

[https://www.thebalance.com/long-term-capital-
crisis-3306240](https://www.thebalance.com/long-term-capital-crisis-3306240)

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code4tee
So SoftBank is loading up We with huge amounts of debt to give it cash (vs a
normal capital investment)? This smells like a leveraged buyout PE move.

The whole side deal on bailing out Adam on his mega personal loans with the
banks is interesting. Reporting suggests he effectively defaulted on those
loans based on previous developments with We but banks gave him some time to
sort things out before calling in the loans.

This whole thing is going to make for an interesting book when the dust
settles.

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justinzollars
WeWork is worth zero dollars.

