SOFTBANK SHARES AN OFFICE. SoftBank Discusses Stake in WeWork – By Todd Horwitz, Bubba Trading


SoftBank Group Corp. is in discussions to take a majority stake in WeWork Cos., in what would be a giant bet on the eight-year-old provider of shared office space, according to people familiar with the talks. The investment could total between $15 billion and $20 billion and would likely come from SoftBank’s Vision Fund, some of the people said. The $92 billion Vision Fund, which is backed largely by Saudi Arabia and Abu Dhabi wealth funds as well as by SoftBank, already owns nearly 20% of WeWork after last year committing $4.4 Billion in equity funding at a $20 billion valuation.

The deal – a massive, perhaps unprecedented investment in a private company even by the dizzying standards of Silicon Valley – would effectively give Japan’s SoftBank control of the fast-growing office sharing company. And it would cement SoftBank Chairman Masayoshi Son’s position as the dominant power in the modern tech economy, with everything from the semiconductors that power smartphones to telecommunications networks in his empire. The discussion to invest in WeWork are ongoing and a deal is not guaranteed, according to the WSJ report, which cites anonymous sources. Representatives of SoftBank and WeWork did not immediately return Business Insider’s requests for comment.

WeWork, which was founded 8 years ago, has attracted billions in capital to fund its business fitting up and leasing out building space as shared offices. The company has expanded to 22 countries and is on track to generate more than $2 billion in revenue this year. But the company’s rapid expansion and multiple diverse acquisitions mean it’s burning money. Skeptics worry that WeWork’s core proposition of taking on long leases, doing up office spaces, then subleasing them doesn’t justify its huge valuation.

The company lost hundreds of millions of dollars in the first six months of the year according to media reports, and its losses in the UK nearly tripled, according to recent filings seen by Business Insider. That said, WeWork’s European flagship building in London turned a profit in 2017, a vindication of what the company claims is a viable business model.

Todd “Bubba” Horwitz


Financial Markets and Political Commentary