WeWork sues SoftBank over 'AWOL' $3bn shares purchase – which included millions lined up for ousted CEO Neumann WeWork sued SoftBank on Tuesday after the Tokyo-based holding company nixed its plan to purchase $3bn in shares of the struggling office-leasing biz from existing shareholders. The lawsuit [PDF], filed in Delaware's Court of the Chancellery, alleges SoftBank breached its fiduciary duty by terminating its share purchase plan, …
You mean like HP should have done with another company that was possibly built on 'smoke and mirrors'?
Seems like a lot of Big Biz get far too excited when take over fever strikes.
Seems like a pretts clear case of 'Act in Haste, Repent at Leisure'.
Interesting article a few months back on what Softbank may have been hoping to get out of this:
https://nplusonemag.com/online-only/online-only/then-wecame-to-the-end/
surely they would notice some risks here
You have to understand the cultural and accounting differences to fully get why Japanese banks don't behave the same way as everyone else.
Marking to market, reflecting the underlying value of the assets at sale price today rather than the price paid, would create a major loss of face for executives up and down the banks management structure, so they prefer not to do it.
Regulatory reporting in Japan doesn't insist on value at fire sale prices, rather there are different provisions for the value of something, which again plays into the banks view of the risk and what we can only see as losses from this point.
Both of the above allow and reflect the taking of extremely long term views - culturally Japan considers the future in terms of generations rather than quarters as we do in the West.
Particularly considering the current pandemic, I don't see a bright future for shared workspaces.
Well, maybe they could retrofit sprinkler systems, insofar as they are present, with the antiviral agent du jour, and run a cron job to trigger them once a day.
Will likely discourage people from leaving papers and laptops on their desk overnight too.
I normally don't wish people ill-will... but I really do hope he's already gone out and bought the Porsche and the gazillionaire lifestyle on credit before the deal is actually done. His own finances will then be in the same state as the farcical valuation that was put on his low grade lettings agency.
Softbank, hopefully not too late, have now realised this; hence all the mewing from the snouts at the tough.
They knew. They always knew.
VCs and their ilk are one huge con, an immoral pump and dump Ponzi scheme. Valuations on not-yet-listed companies are determined almost entirely by the amount and percentage at which investors buy in. Institutional investors and successive rounds pay more not because they believe the finances (who would?) but because each such investment bumps the final IPO valuation.
At every stage the aim is to increase the valuation so either (a), you can sell your shares privately at a newly-inflated rate, cashing out, or (b), you can attract more investors at a higher rate which increases the valuation, or (c), the end game, an IPO at a huge premium on what you paid yourself.
Everybody wins except those who join the game last. The problem here is not that Softbank figured it out. They knew. They were playing the game. The issue is that Softbank have realised that the outside world have figured it out. The eventual IPO is not going to be the massively overvalued payout offloaded onto society (pensions, small investors) that Softbank were expecting. So they want out.
Then entire stock market is a pump n dump Ponzi scheme.
How else could any company be "worth" billions of dollars, and yet one weeks worth of no sales has them begging on the government doorstep for a fucking bailout?
The opening of the Dow should be done by Drew Carey every morning. "Welcome to the Dow Jones Index. Where the valuations are made up, and the points don't matter."
"VCs and their ilk are one huge con, an immoral pump and dump Ponzi scheme."
Not quite.
Venture Capitalism is gambling. Traditionally VC's knew full well that 95-98% of the companies they invested in would fail - but the ones that paid off would REALLY pay off.
The problem is when you get traditional gamblers taking part - the kind who big up their wins and hide their losses, or people coming in who've been sold Venture Capitalism on this basis.
Over the last 30 years, VC has moved from being speculative investment in fringe stuff that might pay off in the long term to being scam driven from top to bottom, with investors expecting a return on everything. It just doesn't happen.
Parallel with that, most of the startups in SillyCon valley are built on a mountain of debt - aiming not to make money, but to be bought out at vastly inflated values by VCs or established outfits - at which point the principals can take the money and run.
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