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Coworking: WeWork taken over by Japanese technology investor

2019-10-23T07:12:29.048Z

His biggest investor has to save office service provider WeWork. The startup has no money left and recently had to cancel its IPO.



Major shareholder Softbank acquires office space provider WeWork after its canceled IPO. WeWork informed us. The Japanese technology investor spends another $ 9.5 billion on new loans and the purchase of shares in the ailing company. In this context, WeWork co-founder Adam Neumann, who recently stepped down as chief, will also be paid. Once that's done, Softbank will hold 80 percent of Wework.

WeWork's business model is to reach modern open-plan offices, including sofa landscapes and table football, and then rent jobs and conference rooms to freelancers, teams or entire companies for a short or long term.

Softbank and its Saudi Arabian-backed fund Vision Funds have already invested $ 9 billion in WeWork, holding 29 percent of the company's stock. Meanwhile, WeWork is valued at $ 8 billion, just a fraction of what the company was worth at the beginning of the year. According to the US media, the coworking service provider founded in 2010 was one of the most valuable startups in the world with a valuation of 47 billion dollars in January.

However, WeWork would have been much less valuable on the stock market. The ambitious plans of ex-chief Neumann failed in September. In addition, WeWork continues to make losses on its business and the money has recently become very scarce. By the end of the year, the startup would not have had capital without the new investments from Japan. For Neumann, however, the WeWork takeover by Softbank means a good deal: According to information from the news agency Bloomberg, he is allowed to sell shares for up to a billion dollars to Softbank through the deal, gets a million credit and consultant fees in the three-digit million.

For Softbank shareholders, the decline of WeWorks is not good news. The price of the company, which among other things also invests in the payment service provider Wirecard, dropped by more than three percent to 4164 yen after the announcement of the new billion-dollar injection. The share thus built up its losses in recent months. In April, the paper had cost almost 6,000 yen.

Source: zeit

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