6 ms·
How Do You Like We Now
- wootie512 7y agohttps://outline.com/V5eEFX https://outline.com/V5eEFX
- ReggieJJJ 7y ago.
- Reebz 7y ago“[SoftBank] put into WeWork, an astounding total of more than $18.5 billion for a company it values at $8 billion.” Wow. I think when they do end up writing that HBS case, this will also serve as a wonderful example of sunk cost fallacy.
- rootsudo 7y agoNot really - they just bought it on a Huuuuuuge discount compared to what, a month ago?
- xrd 7y agoIt being the value they already tied themselves to? It's technically correct, but Neumann seems to have understood they could either buy him out now and save some of that value, or not buy him out now and lose most of it.
- deleted 7y ago[deleted]
- draw_down 7y agoIt is pretty interesting watching Neumann get demonized in realtime. It's not like he broke into people's homes and stole a billion dollars. Softbank gave it to him, and apparently thought everything was going great until a couple months ago. That was their money to set on fire, I have no skin in this game and no reason to hate him. The part I do agree with is the workers who are angry at him for getting rich while they're about to lose their jobs. Terrible optics, for one thing.
- wpietri 7y agoDo the math on how many seed and A rounds that could have been funded with what he burned. That certainly gets me mad, all those entrepreneurs who didn't get a shot.
- draw_down 7y agoI guess, if one also considers any dollar spent unwisely as a lost donation to charity.
- redisman 7y agoI agree that putting that money into seed funds would be the most widely beneficial but the Vision Fund seems to be the opposite of that.
- InvisibleCities 7y agoFuck seed rounds. How many homeless people could be given shelter with that money? How many starving people could have been fed? How many people who died needlessly because they were unable to afford medical treatment could have lived if this money had been given to them instead? There is a tremendous moral rot at the core of American capitalism, and the story of We is exhibit A.
- perl4ever 7y agoThe wealth that was being destroyed from the perspective of society, or the starving, is the losses of WeWork day by day and year by year. I think it's important not to confuse that with the wealth that was merely transferred from one book entry to another. The spectacular destruction of the abstract entity ensures that the slow bleeding doesn't go on. Like, if I have $1B, which is really just a note in a computer and you steal it from me by hacking that computer, or playing a confidence game, that's not the same as if a billion dollar factory burns down.
- JohnFen 7y ago> you steal it from me by hacking that computer, or playing a confidence game, that's not the same as if a billion dollar factory burns down. I honestly don't follow this logic. What is the essential difference?
- freefal 7y agoWhen you’ve got supermajority shares, you can basically put a gun to your own head. Great summary of the situation from the article: “Neumann created a company that destroyed value at a blistering pace and nonetheless extracted a billion dollars for himself. He lit $10 billion of SoftBank’s money on fire and then went back to them and demanded a 10% commission. What an absolute legend.”
- wpietri 7y agoIt amazes me that they didn't call his bluff. They could have said, "We'll let you keep some of your shares, so if this ever works out, you'll make some good money." Because if somebody didn't put up a lot of money, Neumann would get bupkis. His negotiating position was extraordinarily weak. But clearly this is about preserving Masayoshi Son's ego. And reputation, of course. Why would he care if he burns another 5 billion if it helps him keep getting future $100bn investments from his LPs?
- g2ah5z 7y ago> It amazes me that they didn't call his bluff. They could have said, "We'll let you keep some of your shares, so if this ever works out, you'll make some good money." If they had said that, Neumann would have just continued to nuke the company until SoftBank's remaining $8 billion of equity in the company went to $0. SoftBank paid him off to prevent him from further destroying the company.
- onlyrealcuzzo 7y agoDon't minority shareholders have some rights? If they could prove he was running the company into the ground, something could be done... right?
- fiter 7y agoIsn't there some legal fiduciary duty that would prevent the executives of the company from doing this explicitly? Just because 51% of the shareholders want to lose their money doesn't mean the executives can act without regard for the 49%?
- AVTizzle 7y agoWatching WeWork's IPO fall apart was satisfying because it felt, in part, like a small bit of justice being served. Sadly, this outcome for Neumann is the undoing of both that sense of satisfaction and of justice. (Note to self: don't let this jade you. Keep focusing on creating wealth by creating value.)
- wpietri 7y agoSteve Blank, I think in his original, self-published "Four Steps to the Epiphany", said something like, "But if another bubble comes along, ignore all this, because my advice only makes sense if creating value for customers is rewarded". I think he was right, and I really hope WeWork is the end of the "Uber for X" wave, wherein losing gobs of money was somehow seen as a sign of success, and not a cause for great shame. It's be nice to get back to actually serving customers.
- nooron 7y agoThe penultimate slide (132/133) of the Softbank Vision Fund deck from 6/25/2010 is just the words "We (movie)". This now sounds prophetic. If you're curious, you can see the whole strange deck here: https://cdn.group.softbank/en/corp/set/data/irinfo/presentations/vod/2010/pdf/press_20100625_01.pdf?fbclid=IwAR1SyvfHXENSyQ_0eT6IRGDRK5g0dhdkLm9J34EI9GfxXqBI8H1jVzTIxQ8 https://cdn.group.softbank/en/corp/set/data/irinfo/presentat...
- onlyrealcuzzo 7y agoAre we on pace for the CPU, Memory, and Network projections for 2040? It has microprocessor transistors to go from 3bn to 3 quadrillion. Memory to go from 32Gb to 32Pb. And network speed to go from 1Gbps to 3Pbps. I was under the impression that it's looking very unlikely for CPUs to transistors to keep growing exponentially, and that Moore's Law stopped a few years ago? Will we not run into similar physical (?) limitations for memory and bandwidth in the near future?
- nooron 7y agoI have no idea. I meant my comment in jest— this episode is likely to end in a movie about We— since there’s no evidence MS had heard of WeWork as early as 2010.
- janee 7y agoWow that slide deck, I'm thoroughly confused...who could be the intended audience for that??
- neonate 7y agohttp://archive.is/SHVCO http://archive.is/SHVCO
- skybrian 7y agoMatt Levine is amusing as always, but I'm wondering what really happened at Softbank? How did they end up trusted with huge amounts of money?
- leroy_masochist 7y agoS__D_ _R_B__ Would you like to buy a vowel?
- twic 7y ago... shady Gruber? Now you say it, it makes perfect sense.
- brohee 7y agoWhich makes me think, MBS may not be as amused as we are and the odds of Neumann falling in a meat grinder are non null...
- leroy_masochist 7y agoIf I were him I'd be more worried about being seen on the street in any city where there's a WeWork by a current/former employee who went from planning how they were going to spend their options windfall to wondering how they were going to pay the mortgage next month.
- JohnFen 7y agoI like We even less since Neumann was handsomely rewarded for his misbehavior.