Skip to main content

SoftBank could reportedly take control of WeWork at a valuation below $10 billion as the embattled office rental company seeks bailout options

WeWork Press Kit - Conference Room in Dalian Lu

  • WeWork's options to avoid running out of cash could include a SoftBank financing deal that would give the Japanese company — WeWork's largest investor — control of the office rental startup, The Wall Street Journal reported on Sunday.
  • SoftBank's deal could value the startup below $10 billion. The Japanese investment group valued WeWork at $47 billion in its January funding round.
  • WeWork is also working with JPMorgan on another option, lining up billions for a debt deal.
  • WeWork could run out of money as soon as the end of November, The Financial Times reported last week. The company's new co-CEOs are slashing thousands of jobs, selling off businesses, and closing non-core activities like WeGrow. 
  • For more WeWork stories, click here. 

WeWork's cash problems could lead to a takeover by its largest investor that would see its valuation dip below $10 billion, The Wall Street Journal reported on Sunday. 

The office rental company had planned to raise billions by going public, but its initial public offering was shelved after investors raised concerns about its leadership, business model, and conflicts of interest. After co-founder Adam Neumann stepped down last month, new co-CEOs shelved the IPO, made plans to lay off thousands, and embarked on other cost-cutting measures like selling the company's private jet and closing WeGrow, its educational arm. 

Now, WeWork, which has seen its credit rating sink to junk status, could run out of cash as soon as the end of November, The Financial Times reported last week. The company is exploring options to help with the cash crunch.

One solution could be taking more money from its largest investor. SoftBank could invest several billion in new equity and debt, the Journal said. 

Read more: Sex, tequila, and a tiger: Employees inside Adam Neumann's WeWork talk about the nonstop party to attain a $100 billion dream and the messy reality that tanked it

The Japanese investor calculated that WeWork needs at least $3 billion to operate through next year, according to the Journal. The SoftBank deal would reportedly see much of Neumann's voting power shift to the investor, which already has two board seats, and the company would play a bigger part of leading WeWork's turnaround. 

SoftBank could buy in at a valuation below $10 billion, the Journal added. The company last valued WeWork at $47 billion in a January investment round.

SoftBank's money could also be used in part to help Neumann repay his hundreds of millions in personal bank loans. 

WeWork is also looking at a potential bailout package with JPMorgan

wework building facade

SoftBank isn't WeWork's only option for a bailout. The company has been working with major lender JPMorgan to work out a debt package that could be in the billions.

A source told Business Insider top WeWork executives spent last week in JPMorgan's New York headquarters.

"WeWork has retained a major Wall Street financial institution to arrange financing," a WeWork representative told Business Insider in a statement. "Approximately 60 financing sources have signed confidentiality agreements and are meeting with the company's management and its bankers over the course of this past week and this coming week."

See more: How WeWork spiraled from a $47 billion valuation to talk of bankruptcy in just 6 weeks

The Wall Street Journal also reported that SoftBank CEO Masayoshi Son picked Marcelo Claure, the company's chief operating officer, to help WeWork's co-CEOs. Claure, the former CEO of Sprint, has been working with about 20 SoftBank employees to evaluate WeWork's global leases and real estate. 

A representative for SoftBank declined to comment to Business Insider.

WeWork has 528 locations in 111 cities.

Got a tip? Contact Meghan Morris on Signal at (646) 768-1627 using a nonwork phone, Twitter DM @MeghanEMorris, or email at mmorris@businessinsider.com. (PR pitches by email only, please.) 

SEE ALSO: WeWork said to be talking to JPMorgan for $5 billion in debt financing

Join the conversation about this story »

NOW WATCH: 7 lesser-known benefits of Amazon Prime




Get Articles and ICO whitepapers written by Williams Alfred Onen
Labels:

Comments

Post a Comment

Popular posts from this blog

AFFORDABLE QUOTES FOR ICO WHITEPAPERS

An excellent whitepaper is the structure of your initial coin offering (ICO). When you're creating an ICO whitepaper, you will definitely be in need of a writer who is not just skilled in writing, but who likewise comprehends the underlying distributed ledger innovation, along with the background of your exclusive development and business design behind the coin issue. In the first place, you don't wish to have to begin with discussing the difference between coins and tokens, much less what the blockchain is. Dealing with a professional saves you from the frustration and time you have to take in. When you deal with us on your whitepaper, this is what you'll get: Initial consultation where we learn whether we are ideal for one another, followed by a professional quote so you know precisely what you'll get and what the timeline is. The industry-standard ICO whitepaper writing business, with experience in composing lots of whitepapers to date. Timely delivery of ove...
Post a Comment
Read more

Monster List of Markets: 135 Places to Find Freelance Writing Jobs

Are you looking for freelance writing jobs? Here’s a hint. Content mills, bid sites, and job boards might seem like an easy place to go to find freelance writing jobs, but they’re usually a waste of time. Too much competition, flaky clients, low rates. That’s usually what you’ll find there. And it doesn’t have to be that way. You’re better off looking for freelance writing jobs by pitching magazines and websites that pay writers. It’s called pro-active marketing. And it’s a game changer if you’re serious about full-time freelancing. Instead of sitting around waiting for the Mysterious Force to drop some assignments in your lap, pitch a story idea to a magazine or website. Study the market. Come up with a story idea. Do a little research and mini-interview. Then write a great pitch letter and send it off. Rinse and repeat. Need a little help figuring out where to pitch your bright ideas? We’ve done some of the hard work for you. Check out this updated monster list of 135 markets (f...
Post a Comment
Read more

Elon Musk just revealed new details about Starlink, a plan to surround Earth with 12,000 high-speed internet satellites. Here's how it might work.

Elon Musk's rocket company SpaceX plans to launch 60  internet-providing satellites on Thursday evening. The plan for Starlink , as the project is called, is to put a network of nearly 12,000 internet satellites in orbit, which could move internet data about 50% faster than existing fiber-optic cables. Starlink could bring cheap, fast internet to remote areas, airplanes, ships, and cars, plus make international teleconferencing and online gaming nearly lag-free. Financial institutions would also have a lot to gain: Starlink could relay information about faraway markets significantly faster than modern technologies permit. Musk revealed a number of details about Starlink during a call with reporters on Wednesday. Visit Business Insider's homepage for more stories . SpaceX, the rocket company founded by Elon Musk, is trying to launch an internet revolution. On Thursday between 10:30 p.m. and midnight ET (weather permitting), SpaceX plans to launch a Falcon 9 rocket f...
Post a Comment
Read more