Meet WeWork’s Senior Secured Debtor: Softbank!
Softbank is about to lend the coworking giant a LOT of money to secure their place in the inevitable Chapter 11 filing.
I’ve been writing about WeWork for years and after everything we learned from the S1 and the subsequent scuttled IPO it is clear the company is headed for bankruptcy. There is a real company here with real revenues and real assets (however, not as many assets as I would have liked to see). Softbank owns almost 30% of WeWork after having plowed more than $10 billion into the beleaguered startup and they’re not going to let that money go without a fight.
It turns out that the Softbank can blame a Boston-based executive named Ron Fisher for convincing Son to plow billions into WeWork. He’s a South African who earns more than $30 million a year at Softbank. Last year he received a 60%+ raise — not sure he’s getting a raise this year. But you can be sure that BEFORE WeWork files for Chapter 11 protection WeWork will make a final investment in the form of a senior secured loan. The equity will get wiped out and Softbank will be the proud owner of WeWork — it isn’t clear whether or not this will turn out to be a good investment or not. Best of luck to Son…
About The Author
Alexander Muse is a serial entrepreneur, author of the StartupMuse, contributor to Forbes and managing partner of Sumo. Check out his podcast on iTunes. You can connect with him on Twitter, Facebook, LinkedIn and Instagram.