Tender Offer Didn’t Happen. Bonds Plunge to Record Low. This comes after WeWork reported a $1.25 billion loss in Q3. Second thoughts about throwing so many good billions after bad?
You’d think that by throwing billions of dollars at it, SoftBank would somehow manage to clean up this fiasco and make WeWork disappear from the headlines for a day or two, but no.....MUCH MORE
After WeWork’s IPO dream collapsed, and with the cash-burn machine operating so efficiently that it would run out of cash and face bankruptcy this year, SoftBank stepped in with a $9.5 billion bailout – a heroic effort to bail out its own prior $10 billion investment in the company by throwing good money after bad. In the process, WeWork’s valuation plunged from $47 billion to $8 billion, as decided by SoftBank.
The bailout included a $5 billion loan facility, a $1.5 billion cash investment, and a $3 billion tender offer to buy out some early investors and shareholders. This tender offer should have happened by November 6, but hasn’t happened yet, it was revealed today.
According to a letter sent to WeWork shareholders and obtained by The Raw Deal, SoftBank was supposed to launch the tender offer “within five business days of the completion” of the $1.5 billion investment. WeWork made this $1.5 billion payment on October 30. So the deadline for commencing the tender offer would have been November 6....
