I find this story pretty "funny". This company (WeWork) was about to go public in an IPO (valued at $40-60 billion just a few months ago). When the company discloses the recent losses, the interest from new stock investors is poor so they pull the IPO. Now just weeks after the cancelled IPO, the company needs an infusion of cash just to keep operating. Largest investors (Softbank & JPM) didn't want to see the "haircut" on their investment so pulled the IPO and now practically "begging" investors to save the company the way I see it. The founder & CEO was fired recently & also sold several hundred million dollars worth of his stock just months ago. "Writing-on-the-wall" signs? Pretty "greedy" IMO that they (Softbank & JPM) didn't just IPO the company at the lower valuation so they would have received the money they obviously needed. Take the "haircut" now to save the company in the hopes of recovering the losses in the long-term. So they thought the IPO wouldn't fairly value the company yet they're not willing to put more of their own money into the company to keep it afloat? https://www.cnbc.com/2019/10/16/sof...-wework-bailout-proposals-in-coming-days.html
This reminds me of the bull and the bird. One day a bird flies on top of a bull and the bird is completely out of breath. So the bull asks "Hey, what's your problem?" and the bird responds, "I don't know. I think I'm just getting old because I used to be able to fly up to the top of that tree but now I can only manage to fly on your back, no matter how hard I try." The bull responds, "I can fix that. Every day I want you to eat a little bit of my dung and within a month's time, you'll be able to fly up to the top of that tree again." So each day the bird nibbles on a little bit of the bull's dung, and sure enough, within a month's time the bird has regained his strength until the day comes when the bird flies up to the top of the tree he was hoping to reach once again. The farmer on the property was watching all this from his front porch, and as soon as he saw the bird fly up to the top of that tree, he pulled out his shotgun and shot the bird dead just as he landed on the uppermost branch. So the moral of the story is..... bullshit my get you to the top, but it'll never keep you there.
"SoftBank, JP Morgan to submit separate WeWork bailout proposals in coming days" When you owe a Million, you are screwed. When you owe a Billion , you have partners.
But what's most sad is: WeWork to close its WeGrow school https://www.businessinsider.com/wework-closes-wegrow-rebekah-neumanns-school-effort-2019-10 The unfortunate children will now be deprived of: "philosophy of combining education with nurturing through community and mindfulness efforts like yoga.", "weekly trip to the farm", and "happiness, love, spirituality and learning". Aw, so sad...
Had they put "Crypto" "Pot" into their plan the bullshit would have flown even higher! Nice story Baron.
https://www.cnbc.com/2019/10/17/what-happens-if-wework-runs-out-of-cash.html https://www.cnbc.com/2019/10/17/gol...-wework-is-still-profitable-at-this-time.html Some "smart guys" that aren't looking very "smart" IMO. Softbank & JPM >>> Both have billions they could add to their investment but aren't willing to. GS CEO Solomon >>> Solomon also defended WeWork’s model, saying “there is a real business that underlies that.” OK, so if you believe in the business behind WeWorks, why not make another investment in the company when it's struggling to stay alive? GS has billions it could invest. Your current investment won't be worth much in bankruptcy. Summary IMO........They don't see a business model that can turn a profit.
The public wasn’t willing to pay a 47bn valuation. Why should JPM or SoftBank? This is the most fundamental principle of trading.