WeWork says SoftBank will provide $5B in new financing and buy up to $3B in shares from existing shareholders, which would give SoftBank an 80% stake in WeWork
- CNBC's David Faber previously reported that SoftBank was seeking to take control of WeWork through a financing package.
CNBC
Context & Ripple Effects
Two days after reports that SoftBank was moving to seize control of its troubled bet, WeWork has confirmed the terms: $5B in fresh financing plus up to $3B in purchases from existing shareholders, handing SoftBank roughly 80% of the company at a valuation between $7.5B and $8B — per the earlier control talks. The rescue caps a swift unravelling that began when SoftBank itself urged WeWork to shelve the IPO on investor pushback, and reprices a company that crossed a $20B valuation with SoftBank money in 2017.
The deal formalizes what the coverage has been signaling since September: private backers, not public markets, now set WeWork's fate and price.
First-order effects
Existing shareholders get a capped exit — up to $3B of stock purchased at the new $7.5B–$8B valuation — while SoftBank converts its position from anchor investor into an 80% controlling stake.
Second-order effects
A collapse from a $20B-plus mark to under $10B lands directly on SoftBank's portfolio value and, per the September reporting, threatens confidence in its Vision Fund fundraising among outside investors.
Third-order effects
Control-heavy rescues invite governance conflict down the line: the package's tender-offer commitments became the basis for WeWork suing SoftBank for breach of contract months later, showing that takeover terms written in a crisis outlive the crisis.
The trend: When public-market scrutiny rejects a heavily backed startup's valuation, its largest private backer increasingly absorbs control rather than let the company reprice on its own.
Why WeWork founder Adam Neumann is getting $1.7 billion to leave the company he ran into the ground
@profgalloway
Scott Galloway on x
2,000 employees fired as Adam Neumann walks away with an additional $1.7B — $850,000 per employee https://www.bloomberg.com/...
@shiraovide
Shira Ovide on x
Dear. Lord. WeWork “delayed the layoffs earlier this month because it couldn't afford the severance costs.” How did this board let it get so bad? You can ditch the CEO, but where is EVERYONE ELSE? https://www.wsj.com/...
@cnbcnow
@cnbcnow on x
WeWork's Adam Neumann set to receive a $1.7 billion deal to step down from its board, which will include a $185M “consulting fee” from SoftBank and $500M of credit from the investor - WSJ https://www.cnbc.com/...
@bchappatta
Brian Chappatta on x
this line! “A link to a news article about the deal on WeWork's Slack network Tuesday drew more than 100 “thumbs down” emoji from employees.” https://www.bloomberg.com/...
@walldo
Brandon Wall on x
The self-destruction of WeWork felt fairly inevitable if you've spent time in one the last few years IMO, which says a lot about said “idolatry of innovators” here https://twitter.com/...
@carnage4life
Dare Obasanjo on x
The greatest superpower known to man is being a charismatic white guy. WeWork is basically the real estate version of the Fyre Festival minus Ja Rule. https://twitter.com/...
@cnbc
@cnbc on x
WeWork's Adam Neumann will get a $1.7 billion package to step down from the board, source confirms. https://www.cnbc.com/...
@sallyshin
Sally Shin on x
More details on Wework: Without this Softbank deal, WeWork would have been out of money by next Friday, sources tell @davidfaber
@shiraovide
Shira Ovide on x
So, Neumann probably needs a $200 million “consulting fee” because he borrowed a pile of money against his WeWork stock to buy a string of homes and live like a king. He needs to repay those loans, and his stock is worth garbage, so...consulting fee! https://www.wsj.com/...
@kentremendous
Ken Tremendous on x
WeWork lost $2 billion in 2018. Its founder thinks he'll live forever, was once almost charged with drug trafficking for bring so much weed into Israel on his private jet, forced job seekers to do tequila shots, and just made $1.7 billion, but sure, a wealth tax is a crazy idea. …
@madhavchanchani
Madhav Chanchani on x
Bernstein analyst Chris Lane calculated that a revaluation of WeWork to just $8bn would crystallise losses on SoftBank's interests of about $3.6bn, of which $2.2bn would be from its direct investment https://www.ft.com/... via @financialtimes
@mattdpearce
@mattdpearce on x
I am not entirely sure why Adam Neumann is not currently surrounded by a mob with torches and pitchforks. https://twitter.com/...
@tomgara
Tom Gara on x
On the purely amoral metric of extracting money from rich people who aren't as smart as him, Adam Neumann really is an extraordinary success story. https://twitter.com/...
@johnjcook
John Cook on x
it's weird that hundreds of extremely high-priced lawyers and bankers whose purported integrity undergirds the global financial system can conspire to convince investors that a company is worth $40 billion when it actually is worth maybe a tenth of that and no laws are broken?
@matthewstoller
Matt Stoller on x
Any politician who proposes a wealth tax just for Adam Neumann would find bipartisan support. Call it a WEalth tax, just for Neumann. https://twitter.com/...
@yashar
Yashar Ali on x
Former WeWork CEO Adam Neumann will get up to $1.7 billion to give up his voting rights. SoftBank will pay Neumann up to $970 million for his shares, a $185 million consulting fee & will offer him $500 million in credit to repay his loans to J.P. Morgan https://www.cnbc.com/...
@nesrinemalik
Nesrine Malik on x
WeWork story has everything. Icarus over extension, dumb sovereign money, a messianic founder, and ultimately and as usual, the crushing of a large number of little people https://twitter.com/...