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Even if there was humiliation, it was humiliation with a $400M+ payout to Adam Neumann. Softbank set up a really bad example in the industry: you can get away w

Even if there was humiliation, it was humiliation with a $400M+ payout to Adam Neumann. Softbank set up a really bad example in the industry: you can get away with a hefty payout even if you screw your investors and employees with deceit and corruption. For that, Masayoshi Son is a co-conspirator and I think he should not be trusted by anyone and deserve bankruptcy, if not criminal charges.

jdavis703 5y ago
SoftBank employs over 80,000 people. SoftBank’s investments don’t seem to rise to the level of corporate corruption where it seems reasonable to put the employees on the street.
- hintymad 5y ago
  Fair point. My grudge is toward Masayoshi Son. Edited accordingly.
- wussboy 5y ago
  How many employees does a corporation need before it can act unethically?
  - mastax 5y ago
    New unit: Enrons. 1 Enron is 29000 employees. As companies approach the 1 Enron mark their probability of corporate death penalty declines following a logistic curve.
- ethbr0 5y ago
  But at some point (likely when interest rates shift up and/or the market crashes and/or lending tightens), those 80,000 people are going to be out of a job when the whole thing implodes. And at that point, it's a solid argument that they all would have been better off if SoftBank's capital had instead been previously allocated to non-zombie / financial-engineering businesses.
- malcolmgreaves 5y ago
  The employees don't need to suffer. I can imagine a better world where the executives can be jailed and have their controlling shares stripped and given to new leaders. Maybe even the employees themselves.
asdfasgasdgasdg 5y ago
The whole saga is fascinating, but I do wonder about the level of consternation over this. To oversimplify, it seems Adam Neumann was probably either deluded, dishonest, or a bit of both, and conned some rich people into giving him a bunch of money. Isn't this a bit of a morality play, though? These other rich people (i.e. investors in Softbank, Saudi Arabia, other venture firms, etc.) would have never had a problem in the first place if they weren't chasing outsized gains. If these people were happy to track the market, they would not have been conned in the first place. As far as I can tell, your average Joe or Josephine not only does not invest in these vehicles, they cannot! Because they are not accredited investors and/or Softbank's Vision Fund is not accepting new capital. So if you're a normal person worrying about getting conned after reading about WeWork, don't! If you're a rich person, consider settling for the market average rather than trusting an individual like Masayoshi Son with your money. As far Masayoshi Son going to jail, the payoff for Neumann was likely contractually obligated or negotiated to get better leadership into place. Unless some law was broken -- which I doubt, and almost certainly not provably -- criminal charges do not seem to be appropriate. Bankruptcy does not seem to be in the cards either considering he did not have that much exposure to WeWork.
- qeternity 5y ago
  > As far as I can tell, your average Joe or Josephine not only does not invest in these vehicles, they cannot! The absolutely do, even if they might now realize it. The stickiest and most sought after capital for funds is typical from pensions or large asset managers.
  - asdfasgasdgasdg 5y ago
    I feel really bad for anyone whose pension is controlled by an active manager. They'd be much better off with that value in the S&P 500. Fortunately pension funds are insured to some degree in the US, so if a pension fund failed, the cost of making the pensioners whole would really be paid by the taxpayer, not the average person. But in the specific case of Softbank, Saudi Arabia and a few other named billionaires provided more than half of the seed capital.
echopom 5y ago
> Even if there was humiliation, it was humiliation with a $400M+ payout to Adam Neumann. Softbank set up a really bad example in the industry: AFAIK has always been this way for at least a decade. An example would be Docker , has raised more than 200M yet it had no decent stream of revenue , it's litterrally a dead man walking yet the CEO left the boat years ago with tens of millions... Startups that failed and have their founders go "bankrupt" are startups that you never ever hear about... The rest of startups you'll find on HN or have raised 100M+ millions often have their founders pocket millions when they raise very large amount ( 50M+ )... There no surprise here , once you manage to get a business to a certain valuation / run-rate it's worth a lot thus you can trade that for cash , regardless of the "humiliation"

jdavis703 5y ago

SoftBank employs over 80,000 people. SoftBank’s investments don’t seem to rise to the level of corporate corruption where it seems reasonable to put the employees on the street.

hintymad 5y ago
Fair point. My grudge is toward Masayoshi Son. Edited accordingly.
wussboy 5y ago
How many employees does a corporation need before it can act unethically?
- mastax 5y ago
  New unit: Enrons. 1 Enron is 29000 employees. As companies approach the 1 Enron mark their probability of corporate death penalty declines following a logistic curve.
ethbr0 5y ago
But at some point (likely when interest rates shift up and/or the market crashes and/or lending tightens), those 80,000 people are going to be out of a job when the whole thing implodes. And at that point, it's a solid argument that they all would have been better off if SoftBank's capital had instead been previously allocated to non-zombie / financial-engineering businesses.
malcolmgreaves 5y ago
The employees don't need to suffer. I can imagine a better world where the executives can be jailed and have their controlling shares stripped and given to new leaders. Maybe even the employees themselves.

asdfasgasdgasdg 5y ago

The whole saga is fascinating, but I do wonder about the level of consternation over this. To oversimplify, it seems Adam Neumann was probably either deluded, dishonest, or a bit of both, and conned some rich people into giving him a bunch of money. Isn't this a bit of a morality play, though? These other rich people (i.e. investors in Softbank, Saudi Arabia, other venture firms, etc.) would have never had a problem in the first place if they weren't chasing outsized gains. If these people were happy to track the market, they would not have been conned in the first place. As far as I can tell, your average Joe or Josephine not only does not invest in these vehicles, they cannot! Because they are not accredited investors and/or Softbank's Vision Fund is not accepting new capital. So if you're a normal person worrying about getting conned after reading about WeWork, don't! If you're a rich person, consider settling for the market average rather than trusting an individual like Masayoshi Son with your money. As far Masayoshi Son going to jail, the payoff for Neumann was likely contractually obligated or negotiated to get better leadership into place. Unless some law was broken -- which I doubt, and almost certainly not provably -- criminal charges do not seem to be appropriate. Bankruptcy does not seem to be in the cards either considering he did not have that much exposure to WeWork.

qeternity 5y ago
> As far as I can tell, your average Joe or Josephine not only does not invest in these vehicles, they cannot! The absolutely do, even if they might now realize it. The stickiest and most sought after capital for funds is typical from pensions or large asset managers.
- asdfasgasdgasdg 5y ago
  I feel really bad for anyone whose pension is controlled by an active manager. They'd be much better off with that value in the S&P 500. Fortunately pension funds are insured to some degree in the US, so if a pension fund failed, the cost of making the pensioners whole would really be paid by the taxpayer, not the average person. But in the specific case of Softbank, Saudi Arabia and a few other named billionaires provided more than half of the seed capital.

echopom 5y ago

> Even if there was humiliation, it was humiliation with a $400M+ payout to Adam Neumann. Softbank set up a really bad example in the industry: AFAIK has always been this way for at least a decade. An example would be Docker , has raised more than 200M yet it had no decent stream of revenue , it's litterrally a dead man walking yet the CEO left the boat years ago with tens of millions... Startups that failed and have their founders go "bankrupt" are startups that you never ever hear about... The rest of startups you'll find on HN or have raised 100M+ millions often have their founders pocket millions when they raise very large amount ( 50M+ )... There no surprise here , once you manage to get a business to a certain valuation / run-rate it's worth a lot thus you can trade that for cash , regardless of the "humiliation"