Here’s a great article for one of our favorite Commercial Real Estate news sources Propmodo.com on what’s happening with WeWork after SoftBank pulls its funding due to “unfulfilled conditions”.
SoftBank Pulls WeWork Funding for “Unfulfilled Conditions”
As part of the aftermath of the failed WeWork IPO, their biggest investors (in both size and profile) SoftBank committed $3 billion to help keep the company afloat and cash out early investors, including the founder Adam Neumann. Now, SoftBank has pulled out of that commitment citing unfulfilled conditions such as failure to get antitrust approval by April 1, 2020. This has put the company’s future in question even as its Chairman Marcelo Claure recently said that they had $1.3 billion in cash and were prepared to weather the extended closures from the COVID-19 response.
The Hits Keep Coming
The news of SoftBank’s change of plans has bounced around the media and has now been spun as Adam Neumann’s personal loss. While this is definitely one outcome of this turn of events, it is certainly not the only one. Like many startups, early employees were compensated in stock (I am tempted to call them stock options but for most startups they are anything but optional). This means that many people who have been expecting to get paid for their work will have to wait longer for their equity to be worth anything that is remotely considered fungible. This will inevitably make the recent WeWork layoffs even harder for some at a very hard time.