SoftBank Plans $5B Rescue Financing for WeWork

eric_b 6 years ago |

I mean... Masayoshi Son must be one of the worst investors in history, at least in terms of absolute losses. That guy loses more money than anyone.

Lost 70B during the dot com crash. Writing down billions in 2019 on Uber and WeWork. I know a few folks that worked at other companies he/Vision Fund invested in. One received $200M and they had no idea what to do with it. They spent it on headcount, which isn't the smartest when you don't know what direction to go. That investment will never see a positive return.

Anyways, other than Alibaba, does Masa have any other big wins?

rockinghigh 6 years ago | |

Yes, he also made money on Yahoo! and SoftBank.

dmode 6 years ago |

This is just nuts. Wasting tens of billions of dollars. More and more the vision fund looks Saudi’s vehicle to throw money away. There must be some underlying reason why they are ok with wasting this much money. I bet the billions wasted on WeWork, would have lifted hundreds of millions of people out of poverty

chrisked 6 years ago | |

Apparently Masa promised a 1 trillion dollar gift. Maybe they still have hope. Link to interview: https://www.valuewalk.com/2019/03/masayoshi-son-trillion-dol...

dangerboysteve 6 years ago |

When someone searches for a "Sunk cost fallacy" description in the following years, this will be the example everyone will use.

adzicg 6 years ago | |

Possibly, but there is another angle here. WeWork isn’t really a tech or realestate company, but a financial instrument to be propped up and then dumped into the lap of late investors or the market, so that early investors can run away with a nice profit. The IPO attempt failed. Now they need time for people to forget, so the financial instrument can be repackaged and sold to some gullible private investors a bit later. SoftBank will get new shares significantly cheaper than the older ones, and as long as they can keep the patient on life support long enough for someone else to believe in it, the whole game will pay off nicely. Probably a few years though, waiting for the next wave.

smachiz 6 years ago | | |

Except that some percentage of their investment is at a $47B valuation.

They already bought quite a bit of early investors/employees of positions who cashed out happily.

I think this really is about loss mitigation than anything else.

They're already $10B in - spending another $5 to get $10B out vs <$1B out if they go bankrupt is probably worth it.

dmitrygr 6 years ago | | |

So basically a dollar auction [1] on a billion dollar scale?

[1] https://en.wikipedia.org/wiki/Dollar_auction

dangerboysteve 6 years ago | | |

I can't see that happening with all this prior history and bad press. But as they say the market is full of suckers.

api 6 years ago | | |

People have very short memories. Sketchy debt sausages of the sort that helped cause the 2008 crash are a big thing again.

havetocharge 6 years ago | | |

Enriching early investors at the expense of the later ones, is how pyramid schemes work, as well.

docdeek 6 years ago |

If there's one thing to throw after bad money it's good money...

undefined3840 6 years ago |

/r/wallstreetbets

OisinMoran 6 years ago |

Would suggest taking the "Deals" out of the title here, it seems to be some formatting issue.

dr_robert 6 years ago | |

Done, thanks!