SoftBank Takes Ownership of WeWork

Akihabara News (Tokyo) — The SoftBank Group is doubling down on its investment in the troubled startup WeWork with a fresh US$10 billion financial commitment that will see SoftBank own about 80% of the firm’s shares.

SoftBank has declined, however, to take a majority of the voting rights, and will treat WeWork as an associate rather than a subsidiary.

Analysts have grown deeply skeptical about SoftBank Chief Executive Masayoshi Son’s judgment in this matter, with many arguing that he is simply digging himself into a deeper hole on behalf of a fundamentally misguided investment.

At this point, Son has committed about US$13 billion in funds in a startup whose market valuation has currently fallen to about US$8 billion. As recently as January, WeWork had gained a valuation at the stunning US$47 billion level, in spite of a lack of clarity about how its business model could become profitable, or be able to weather any global economic downturns.

Son, however, has remained undeterred, trusting in his own vision and analysis about how WeWork can still become a global business titan.

One person who does not figure prominently in these sweeping plans, however, is co-founder Adam Neumann, who is being paid hundreds of millions of dollars to leave the board of directors, though he will remain as an observer and an adviser.

There are about 25 existing or planned WeWork locations in Tokyo.

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