Finally, SoftBank is Taking Over WeWork!

Must Read

Will Google’s Move To Delete 2,500 YouTube Channels Add Fuel To The Fire With China?

The US-China trade war has started rearing its ugly head. Both sides are now turning to extreme...

Can CBD Gummies Be Beneficial For College Students?

College students often feel more pressure than they have ever—or will ever—feel in their entire lives. Many...

Cloud Computing is Redefining the Education Industry!

Today, the benefits of cloud computing are being recognized in educational industries around the world. Most of...

After weeks of being in the controversial limelight, Adam Neumann and his company WeWork is finally set to meet its ultimate fate. According to various sources of Reuters, Softbank is all set to take over WeWork in a deal said to be worth in excess of $10 billion.

The Softbank and WeWork deal will be involving a handsome payoff to co-founder Adam Neumann so that he can relinquish give up the control of the company. This represents a turn of events which no one expected just two months ago because of the fact that Neumann was prepared to take the company public until very recently. The IPO, however, failed measurably mainly due to the ridiculous valuation of WeWork.

The very fact that Newmann’s company is accepting a rescue offer from Softbank over concerns regarding running out of cash signifies how bad things have become. The company which was valued at $47 billion in January has now plummeted down to a valuation of $8 billion.

Advertisements

The take over of WeWork is not coming cheap for Softbank. As mentioned earlier, one of the major parts of the deal is involved in a payoff to Adam Neumann. The much talked about the co-founder of WeWork may end up receiving $1.7 billion, but he would have to step down from the board and cut off a lot of ties from the company he co-founded nearly a decade ago.

Although he has already stepped down as the CEO of WeWork, he is still the chairman of the board of the parent, We company. For stepping down from the board of the parent, We company, Neumann will be getting around $685 million. SoftBank Chief Operating Officer Marcelo Claure is expected to succeed him as the chairman of the board. Other payoffs to him include a $500 million paycheck to refinance his personal loans, along with $185 million on the side as a consulting fee.

However, the people who won’t be on a receiving end of a hefty paycheck are the employees of WeWork. With the announcement of Softbank WeWork deal, there are expected to be a lot of employee layoffs as Softbank tries to cut down on losses and make the company profitable. WeWork has employed nearly 10,000 people across 500 locations worldwide.

Softbank has planned to launch a tender offer up to $3 billion to acquire shares of WeWork from existing investors and employees. Should it go through, the Japanese firm, which already is a major shareholder and owns around 33% of the company, will be owning somewhere in between 60% and 80% of WeWork. Neumann will be a part of this process as well since he owns around 20% of the company. However, he won’t be allowed to tender his shares over $970 million. He might end up holding on to a stake anyhow, but it might fall south of 10% if the deal goes through.

LEAVE A REPLY

Please enter your comment!
Please enter your name here
Advertisements

Latest News

Can Twitter’s New Feature Really Make You Feel Safe?

Twitter has been on what seems like a campaign to make the site a place for more...

TikTok Acquisition: Not A Cake Walk for Microsoft

After President Trump announced an order banning US companies' transactions with Chinese businesses, which is set to come into effect 45 days...

Can ‘Made In India’ Twitter Alternative Replicate Twitter’s Success?

The popular microblogging platform Twitter has a new Indian clone and it is all set to capture the non-English users in the...

TikTok Stars Are Fighting an Uphill Battle

2020 has proven to be a difficult year for many Chinese-origin apps, including the wildly popular short video app, TikTok. Many Chinese...

Google Is Changing the Face of Global Health

COVID-19 is easily the most catastrophic global health crisis of the 21st century. As July 2020 came to a close, case counts...

After Facebook, Now Twitter is Caught Abusing Phone Number For Ads

Thanatophobia, or fear of death, is a relatively complicated phobia. Similarly, fear of losing your digital accounts to hacklers or scammers is equally...

In-Depth: Dprime

Facebook Subscription Model: Looking Beyond Ad Dollars?

Seldom do job listings create a stir this gripping. However, when the job listing in question is a stealth post from Twitter,...

Will The Online Food Delivery Market in India End Up Becoming A Two-Horse Race?

It's pretty much evident that the food delivery space in India is all set to get riled up soon enough as one...

Fantastic 4: Four Day Work Week A Flashpoint Of Innovation?

It has been an idea that has been mooted by many, perhaps also somewhat sceptically. From being a dark horse to becoming...

More Articles Like This