
WeWork founder will get $1.7B to let SoftBank take over his company - abhi3
https://www.theverge.com/2019/10/22/20926583/wework-founder-adam-neumann-softbank-takeover-payout
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nlh
I think what this shows is in the end is who was in the position of greater
leverage here (hint: it wasn’t SoftBank).

I bet Neumann was all “ok cool guys I’ll walk away with my $700m and you can
write down We to $0 and enjoy that.”

Turns out, SoftBank needs We to be not-dead-yet about $1.7B more than Neumann
does.

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lordnacho
This will inspire generations of future businesspeople to do the same. Start a
business, paint it like a tech firm, get snowballing investment, and don't
worry too much about whether the business can ever actually work.

~~~
yowlingcat
* was inspired by

* generations of prior businesspeople doing

Let's not forget that Enron, Theranos and WeWork propagated a form of
corporate fraud that is not foreign to the modern corporate investment system.
There are always opportunities to bolt on corporate structures that juice the
plausible metrics and existence of an "investable" moat, but at least in more
public markets oriented world of yesteryear, SEC regulations could be put in
place to plausibly protect main street investors. In the current engorged
state of private capital, many private investors will have to learn due
diligence the hard way, or they will lose their shirts to exceedingly savvy
hucksters and grifters masquerading as trailblazing mavericks.

~~~
neilc
> Let's not forget that Enron, Theranos and WeWork propagated a form of
> corporate fraud

What aspect of WeWork was/is fraudulent?

~~~
raiyu
I think as they dig in to the numbers more there maybe some fraud or very
shady accounting that starts to pop up.

~~~
lordnacho
That might happen, sure, but the point was rather that you just need to look
like you're gonna be something to get paid. This will make everyone who wants
to start a business at least tempted to spend more time building a facade than
an actual business.

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anm89
How is it possible that they couldn't get a better deal out of Neumann?

What was he not going to take a quarter of that? If softbank walked his and
We's value would have dropped through the floor.

This is so bizarre it feels like there has to be fraud somewhere.

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mytailorisrich
This will put his _cash_ earnings from WeWork at $2.4b+. This man is a genius.

~~~
travisoneill1
It's not that he is a genius but that his investors were complete idiots.

~~~
tim333
The odd thing is the main investor, Masayoshi Son has a reputation for being
pretty smart. Guess he got carried away?

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mytailorisrich
People were seen as smart for investing in the "new economy" until about 2000.

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basch
Thats this guy everyone is talking about. He lost $70B in 2000.

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tengbretson
Have there been any allegations of criminal behavior from the founder? This
level of bamboozlement usually includes actual crimes being committed.

~~~
rapsey
Or maybe softbank has redefined what dumb money means.

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ameister14
Is Masayoshi Son in his own personal 'Brewster's millions' situation somehow?

~~~
ykevinator
Ha great reference

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katmannthree
How is it that a trainwreck like We* slips past a major financial player? I've
seen posts here that were skeptical of We from the beginning, and so many of
Adam's financial moves have appeared to be self serving even to laypeople.

Was SoftBank blind to the issues? Was it some form of willful ignorance?

~~~
rapsey
Uber and lyft are trainwrecks as well. They IPO’d a business that burns money
without any hope for profit. We are just witnessing the slow bursting of the
current bubble and people are waking up to basic economics again.

~~~
doc_gunthrop
It seems to me that Uber's endgame goal is to replace drivers with a reliable,
matured self-driving technology. If and when that happens, they can purge
their massive fleet of drivers thereby eliminating their largest overhead
cost.

~~~
rapsey
Unfortunately there is no realistic way their money will stretch that far into
the future.

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altoidaltoid
The ultimate failing up

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pontifier
This makes me sick. This is not the type of behavior that should be rewarded.

This dangerous trend is growing. Value creation and true innovation are not
being rewarded as they should, while corrupt thieves thrive.

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mikeryan
If I'm clear that the 1.7B is:

$1B in stock purchase $500M in a line of credit $185M consulting fee?

I wonder what the valuation is for the $1B in stock purchase?

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exogeny
It's going to be wild in twelve months when we have the "Bad Blood"-ish book,
the attendant sale of the movie rights, and the conservative-libertarian
thinkpieces that vaguely defend him.

But also, fuck this guy.

~~~
damq
This guy is pretty far left (to the point that he banned meat in his offices).
I doubt conservatives and libertarians are going to be bending over backwards
to defend him.

~~~
exogeny
There have been multiple articles defending Elizabeth Holmes, and her personal
politics are just as liberal.

It's not about defending the person, it's about defending this vague
entrepreneurial ideal of the renegade founder, the Jobsian inability to accept
the status quo.

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heyflyguy
so they really want his ass out of there.

