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Can someone explain what's going on here? I have heard the craziest range of stories. Do a news search and it seems every article has come up with different num

by gexla 7y ago

Can someone explain what's going on here? I have heard the craziest range of stories. Do a news search and it seems every article has come up with different numbers. It would seem crazy to me that the founder would get such a big payout, on the other hand, it also seems this could be a massive win for Softbank if Wework could get back on track?

zimpenfish 7y ago
> It would seem crazy to me that the founder would get such a big payout When the founder is as big of a toxic drag on the company image as he is, it's probably worth more than $1B to Softbank to make him go away quietly and remove any vestige of his presence.
- kelnos 7y ago
  The IPO likely would have launched at somewhere between a $10B and $15B valuation. After kicking Neumann out and making some changes that look very sane on paper, the valuation has dropped to around $8B. Not saying I'd ever want to work with Neumann, but arguably he wasn't the worst of the drag. He successfully got Son/SoftBank to believe WeWork was worth up to $47B, and got a ton of money while retaining control of the company. I wonder if WeWork might have been better off (at least in the short/medium term) if Neumann had stayed on and they'd've gone through the IPO.
troydavis 7y ago
> Can someone explain what's going on here? The founders retained voting control of the company when they raised outside capital. SoftBank - really, Masayoshi Son - is now buying both the voting control and the shares. Since these things have value, SoftBank is paying for them, though less than they would have 6 months ago and potentially less than they would have at the time they invested. If you want to blame anyone, blame SoftBank for negotiating very poorly as they invested in WeWork. I’m not convinced that anyone is to blame, though, since SoftBank had every right to make that decision and all parties knew the risks. Everyone, including employees, knew and accepted that the founders controlled the company in perpetuity… which made no more sense 3 months ago than it does now. At some point, something like this - the founders or their heirs selling their control and equity - was going to happen, even if it was 5 or 50 years in the future. The company was transparently structured to put the founders first.

by gexla 7y ago

zimpenfish 7y ago

> It would seem crazy to me that the founder would get such a big payout When the founder is as big of a toxic drag on the company image as he is, it's probably worth more than $1B to Softbank to make him go away quietly and remove any vestige of his presence.

kelnos 7y ago
The IPO likely would have launched at somewhere between a $10B and $15B valuation. After kicking Neumann out and making some changes that look very sane on paper, the valuation has dropped to around $8B. Not saying I'd ever want to work with Neumann, but arguably he wasn't the worst of the drag. He successfully got Son/SoftBank to believe WeWork was worth up to $47B, and got a ton of money while retaining control of the company. I wonder if WeWork might have been better off (at least in the short/medium term) if Neumann had stayed on and they'd've gone through the IPO.

troydavis 7y ago

> Can someone explain what's going on here? The founders retained voting control of the company when they raised outside capital. SoftBank - really, Masayoshi Son - is now buying both the voting control and the shares. Since these things have value, SoftBank is paying for them, though less than they would have 6 months ago and potentially less than they would have at the time they invested. If you want to blame anyone, blame SoftBank for negotiating very poorly as they invested in WeWork. I’m not convinced that anyone is to blame, though, since SoftBank had every right to make that decision and all parties knew the risks. Everyone, including employees, knew and accepted that the founders controlled the company in perpetuity… which made no more sense 3 months ago than it does now. At some point, something like this - the founders or their heirs selling their control and equity - was going to happen, even if it was 5 or 50 years in the future. The company was transparently structured to put the founders first.