
SoftBank to slash planned WeWork investment - trimbo
https://www.ft.com/content/282bd084-12a0-11e9-a581-4ff78404524e
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owens99
"Japanese tech investor will inject $2bn into shared-office provider, down
from planned $16bn"

"The funding could be announced as soon as this week, according to one of the
people, who added that the deal had not yet been agreed and could still fall
apart."

It's also yet to be seen if SoftBank will exercise their $3B in warrants (one
due this month and the next in April).

I believe there's a high chance the $3B in warrants get exercised and the $2B
mentioned in the article closes, but it's still a risk.

"[WeWork] has more than $6bn of cash and cash commitments on hand."

This is a bit misleading because according to WeWork's Q3 deck they had $2.5B
in cash and are at a quarterly burn rate of $500M, giving them until the end
of 2019 to survive assuming costs don't go up dramatically because of free
rent periods on their properties expiring or the increased costs they will
bare from their massive expansion.

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AmericanBlarney
At it's core, WeWork's business model seems solid and every time I've been in
one, it's been at least close to full. If the main driver of the losses is the
initial investment in acquiring and remodeling the real estate, then they're
in fine shape - they could always pull an Amazon and stop expanding for a
quarter to show just how profitable they could be. I'd think that's the most
likely scenario but, if not, I can't imagine why anyone would throw good money
after bad.

~~~
RobLach
WeWork has a major problem in that they signed a vast number of real estate
contracts during the financial crisis 10 years ago at fire sale prices that
are now expiring and will require renegotiation. Unfortunately for WeWork they
are a gentrification agent which means those leases are going to be negotiated
at rates which would be a multiple of what they were originally at.

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crsv
Paywalled. :(

~~~
trimbo
Use the HN "web" link, or here's an article about the article.

[https://www.reuters.com/article/us-wework-m-a-
softbank/softb...](https://www.reuters.com/article/us-wework-m-a-
softbank/softbank-to-slash-planned-wework-investment-ft-idUSKCN1P11YJ)

