WeWork sparks worries about Masayoshi Son’s Vision Funds

WEWORK’S BUILDING in Tokyo’s Shibuya district is a cross between an iceberg and a plastic bottle passed through a shredder. Fitting, then, that the office-rental firm’s abortive listing, shelved on September 17th, threatens a financial shredding for its mastermind, Masayoshi Son—and that the debacle may be the tip of an iceberg for his $100bn Vision Fund (VF).

Mr Son bet on Adam Neumann, WeWork’s charismatic co-founder, after meeting him for half an hour in 2017. SoftBank, the Japanese group Mr Son controls, and the VF then gave the firm $4.4bn, despite its tenuous claim to techiness. Mr Son would reportedly have handed over another $16bn this year had Saudi Arabia’s sovereign-wealth fund, the VF’s biggest backer, not objected. But SoftBank gave WeWork $2bn anyway. All told, the VF and SoftBank have invested or committed to invest $10.65bn in the firm and own 29% of it.

Had WeWork gone public at $20bn (less than half the valuation of $47bn in its latest funding round), the VF and SoftBank could under one scenario have faced unrealised losses of up to $7.5bn, estimates Atul Goyal of Jefferies, an investment bank. As sentiment soured, partly owing to WeWork’s weak corporate governance, reports surfaced of Mr Neumann contemplating a value as low as $10bn.

WeWork will again attempt to list later this year—presumably...

via Business Feeds

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