4 ms·

He already ferreted away $700m. He'll be fine.

by atdrummond 7y ago

booi 7y ago
Well.. if you call that living...
fjp 7y ago
And then borrowed $300-some million secured against his WeWork shares
- api 7y ago
  I just did some work to get together info for an investor due diligence questionnaire and I LOLed when I came to a long series of questions at the end that I swear were an itemized list of all the shenanigans that went on at WeWork. Loans of that sort were one of the items.
- bobbylarrybobby 7y ago
  Sucks to be that bank
endymi0n 7y ago
You better hope he did that in a squeaky clean way - if there‘s just the slightest hint of embezzlement, you can be sure there‘s going to be an army of SoftBank lawyers trying to make a case.
unaxk38 7y ago
That number is so misleading. I wish the media/prof Galloway would stop referencing it. The $700M number is a mix of a $300M secondary sale to SoftBank and a $400M loan to purchase stock options. We don't know enough to say how far ahead (or behind) he is. He likely exercised his stock options at a highly inflated value, which means his AMT bill must be huge. Not only that, he is sitting on stock that is rapidly diminishing in value, and there's a non-zero chance it could be worth 0. So he has maybe $150M cash after the $300M sale + ??? value of stock from exercising $400M in options. And his liability is his capital gains bill from the $300M sale + the $400M loan to pay back + AMT bill from the exercise of stock options.
- MuffinFlavored 7y ago
  > he has maybe $150M cash $150m is enough to be fine too :)
  - unaxk38 7y ago
    His worth is assets - liabilities. I'm saying his liabilities look huge, much more than $150M.
- paulsutter 7y ago
  He surely owns his stock outright, not as options, since he founded the company.
  - unaxk38 7y ago
    No, that isn't how options work. Everyone needs to pay...it's just usually when you found a company you're buying options for fractions of a penny. See https://www.axios.com/behind-wework-founders-700m-cash-out-37b82639-272a-4846-9a43-7deb567b04a4.html https://www.axios.com/behind-wework-founders-700m-cash-out-3... for more info on the $400M loan - it's not clear if it's to purchase his stock options or to pay for AMT...it's likely additional options he was granted through the years at a higher strike price.
    - sieabahlpark 7y ago
      When you found the company you own the shares. You divy out options when you, the founder, hire or make deals. You could alternatively also give actual shares (usually VCs get a share %)
      - unaxk38 7y ago
        See the axios article. The $400M was a loan to exercise stock options. You can acquire more options after founding a company as part of a bonus or additional comp...
raiyu 7y ago
Those stock sales weren't squeaky clean and there are numerous reports. Some have it as loans that are backed by stock, which means no stock was actually sold. Other accounts have it that he used some of the proceeds of the $700MM to actually buy even more WeWork shares which makes absolutely no sense as any financial advisor would tell you to diversify your holdings, not use borrowed money to leverage up on an investment that is 99.9999% of your net worth. He's also bought personal and business properties and there are reports that he will have to sell some assets to close some financial holes that he is encountering. I mean with the way WeWork was run, it's not surprising the his own personal finances are mimicing that of WeWork - a house of cards that needed to keep the merry go round working in order not to fall apart. He was definitely banking on a successful IPO, but looks like there maybe personal fallout from all of this for him as well. Not to mention that now that they have new co-CEOs in there they will be looking through the books so if there are any financial irregularities, such as has been reported of potentially costs being booked as revenue (wtf?) - then there maybe further legal action against him. I think this story will continue to unfold for some time.

He already ferreted away $700m. He'll be fine.

booi 7y ago

Well.. if you call that living...

fjp 7y ago

And then borrowed $300-some million secured against his WeWork shares

api 7y ago
I just did some work to get together info for an investor due diligence questionnaire and I LOLed when I came to a long series of questions at the end that I swear were an itemized list of all the shenanigans that went on at WeWork. Loans of that sort were one of the items.
bobbylarrybobby 7y ago
Sucks to be that bank

endymi0n 7y ago

You better hope he did that in a squeaky clean way - if there‘s just the slightest hint of embezzlement, you can be sure there‘s going to be an army of SoftBank lawyers trying to make a case.

unaxk38 7y ago

That number is so misleading. I wish the media/prof Galloway would stop referencing it. The $700M number is a mix of a $300M secondary sale to SoftBank and a $400M loan to purchase stock options. We don't know enough to say how far ahead (or behind) he is. He likely exercised his stock options at a highly inflated value, which means his AMT bill must be huge. Not only that, he is sitting on stock that is rapidly diminishing in value, and there's a non-zero chance it could be worth 0. So he has maybe $150M cash after the $300M sale + ??? value of stock from exercising $400M in options. And his liability is his capital gains bill from the $300M sale + the $400M loan to pay back + AMT bill from the exercise of stock options.

MuffinFlavored 7y ago
> he has maybe $150M cash $150m is enough to be fine too :)
- unaxk38 7y ago
  His worth is assets - liabilities. I'm saying his liabilities look huge, much more than $150M.
paulsutter 7y ago
He surely owns his stock outright, not as options, since he founded the company.
- unaxk38 7y ago
  No, that isn't how options work. Everyone needs to pay...it's just usually when you found a company you're buying options for fractions of a penny. See https://www.axios.com/behind-wework-founders-700m-cash-out-37b82639-272a-4846-9a43-7deb567b04a4.html https://www.axios.com/behind-wework-founders-700m-cash-out-3... for more info on the $400M loan - it's not clear if it's to purchase his stock options or to pay for AMT...it's likely additional options he was granted through the years at a higher strike price.
  - sieabahlpark 7y ago
    When you found the company you own the shares. You divy out options when you, the founder, hire or make deals. You could alternatively also give actual shares (usually VCs get a share %)
    - unaxk38 7y ago
      See the axios article. The $400M was a loan to exercise stock options. You can acquire more options after founding a company as part of a bonus or additional comp...

raiyu 7y ago

Those stock sales weren't squeaky clean and there are numerous reports. Some have it as loans that are backed by stock, which means no stock was actually sold. Other accounts have it that he used some of the proceeds of the $700MM to actually buy even more WeWork shares which makes absolutely no sense as any financial advisor would tell you to diversify your holdings, not use borrowed money to leverage up on an investment that is 99.9999% of your net worth. He's also bought personal and business properties and there are reports that he will have to sell some assets to close some financial holes that he is encountering. I mean with the way WeWork was run, it's not surprising the his own personal finances are mimicing that of WeWork - a house of cards that needed to keep the merry go round working in order not to fall apart. He was definitely banking on a successful IPO, but looks like there maybe personal fallout from all of this for him as well. Not to mention that now that they have new co-CEOs in there they will be looking through the books so if there are any financial irregularities, such as has been reported of potentially costs being booked as revenue (wtf?) - then there maybe further legal action against him. I think this story will continue to unfold for some time.