How much did investors lose on WeWork?
Investors stuck by Son when SoftBank announced a holding company strategy in 2015 to hive out its staid but profitable domestic telecom business to become the world's largest investor in volatile tech startups. When the Vision Fund booked an $18 billion loss on investments like WeWork and Uber Technologies Inc.
Masayoshi Son, the founder of SoftBank, became one of them in 2017 with an initial outlay of $4.4 billion in a deal valuing WeWork at $20 billion. In January 2019, SoftBank pushed the valuation to $47 billion. An attempt to sell an initial public offering later that year was a disaster.
SoftBank Founder Masayoshi Son Loses $25 Billion in Tech's Brutal Winter - Bloomberg.
The company was planning to join the stock market at a $47bn valuation, but when investors started scrutinizing the company's business model and corporate governance structure, its value collapsed and it called off its plans. WeWork laid off 2,400 employees and Neumann was given $445m to leave the company.
WeWork's revenue increased in the fourth quarter of 2021, but it's still losing millions of dollars, according to the company's fourth-quarter earnings call on Friday.
'Fighting Over Money'
Kutcher also invested in WeWork, a billion-dollar company that's collapsed in recent years.
Masa Son, founder of SoftBank SoftBank, made a $4 billion bet on WeWork in 2016. Masa would later promise to take over the company for $20 billion and make it into a $10 trillion behemoth by 2028.
SoftBank put more than $10 billion into WeWork, which went public last year and is now trading at less than $6 billion. And after the Arm deal with Nvidia collapsed, SoftBank plans to take the chip design company public instead.
The billionaire boss of SoftBank Group has admitted to poor judgment in trusting former WeWork chief executive Adam Neumann, after the plunging valuation of the office space company pushed the Japanese tech investor to a 704bn yen (£5bn) quarterly loss.
In November 2019, SoftBank took an $8.2 billion write-down on its WeWork stake, including a $3.5 billion hit to the SoftBank Vision Fund, the company's $100 billion venture-capital portfolio. (The parent company took the rest of the blow.) After the write-down, SoftBank valued WeWork at $7.8 billion.
Did Adam Neuman get his money from SoftBank?
Adam sued SoftBank, before reaching a settlement with the Japanese firm that reportedly awarded him 50% of what was initially offered—leaving Adam with $480 million instead of $960 million, $50 million for legal fees, another $50 million for a noncompete fee, and a five-year extension on a $430 million loan.
After a few days of back and forth, Masa offers Adam a whopping $975 million for his shares, $500 million loan for WeWork to keep the lights on, and $185 million consulting fee; this results in Softbank owning 80% of WeWork. Adam and Rebekah walked away from their company with all the money (or so they thought).
A WeWork office in New York.
“While WE's storied past is well known, less appreciated is that WE is on the path to achieve profitability by late 2023/early 2024, which could accelerate given its flexible work station business model fits in the post-COVID world,” he wrote in a research note.
Outlook: The Company reaffirms its full year 2022 revenue guidance to $3.4 - $3.5 billion and Adjusted EBITDA of negative $400 - $475 million. Consistent with previous reporting, guidance for full year 2022 excludes the impact of fluctuations from the Company's original budgeted foreign exchange rates. WeWork Inc.
Moreover, a former WeWork employee lodged a civil case alleging that she was sexually assaulted at corporate events, including at the company's 'Summer Camp', and the human resources department did not act based on her complaints. She was later fired for “poor performance”.
Outlook: WeWork expects to deliver between $3.8 and $4.0 billion systemwide revenue in 2022. On a consolidated basis, the company expects to deliver between $3.35 and $3.5 billion revenue in 2022, including between $740 and $760 million of revenue in Q1 and between $775 and $825 million of revenue in Q2.
Considering the fact that Ashton Kutcher has a reported net worth of $200 million in 2022, he is not yet a billionaire.
WeWork is reported to have received around $1 million from their first round of funding. Fidelity and Benchmark Capital were the two most prominent investors, at $900,000 each.
- Oleg Tscheltzoff.
- DAG Ventures.
- Star Farm Ventures.
- SilverTech Ventures.
- Oliver Jung.
- Joule Ventures.
- RRE Ventures.
- & 1 more.
WeWork, which went public two weeks ago via a special purpose acquisition company (SPAC), laid off thousands of employees after its IPO plans fizzled in 2019, not long after its valuation reached a peak $47 billion. Investors questioned the company's business model and the unorthodox management style of Neumann.
How much is WeWork worth now?
Nine years later, WeWork grew to a $47 billion valuation. The company was under the We Company umbrella, which also includes a co-living venture, WeLive, and the "conscious entrepreneurial school" WeGrow, which announced it would close in fall 2019 at the end of the academic year.
His severance package was big bucks
The former CEO was paid US$1.7 billion, including a US$500 million loan to repay a credit line. He also pocketed US$185 million in consulting fees for SoftBank, which took up the reins of WeWork.
Adam Neumann, a WeWork co-founder, and SoftBank, the co-working company's largest shareholder, announced on Friday that they had settled their legal dispute, opening the way for WeWork to go public just 16 months after SoftBank rescued it from collapse.
Masayoshi Son, the Japanese conglomerate's founder, said SoftBank would take fewer big risks in the future.
WeWork's largest investor, SoftBank, had put more than $17 billion into the firm since 2017, only to see WeWork's valuation dwindle down to around $9 billion. SoftBank and WeWork have paid hundreds of millions to formally sever its ties with Neumann.
SoftBank said the offer to buy WeWork shares could not close because certain conditions had not been met. These, SoftBank said, included the failure to obtain antitrust approvals and complete takeovers of joint ventures in Asia.
SoftBank put more than $10 billion into WeWork, which went public last year and is now trading at less than $6 billion.
WeWork's largest investor, SoftBank, had put more than $17 billion into the firm since 2017, only to see WeWork's valuation dwindle down to around $9 billion. SoftBank and WeWork have paid hundreds of millions to formally sever its ties with Neumann.
He officially left WeWork in June 2020, making him one of the last former executives to exit. McKelvey has kept a low-profile in the ensuing years. He isn't very active on social media, nor does he share much of his personal life online.
Did SoftBank buy WeWork?
SoftBank has decided it will not buy $3 billion in WeWork stock from other shareholders, a board committee of the office space company said Wednesday night, dealing a blow to shareholders, including Adam Neumann, the company's co-founder and former chief executive, who had hoped to sell their stock.
