Original title: Softbank plans to invest $ 5 billion in WeWork, still not holding a controlling position
Financial Sector American Stocks According to foreign media reports, exclusive news has surfaced on the Nikkei Asian Review website today that Softbank has decided to invest about $ 5 billion in WeWork's gigantic office office.
The report said that Softbank will soon formally propose a WeWork plan. The funds will come directly from the Softbank Group, and not from its vision fund. The deal will give Softbank more shares in WeWork, but it still does not have a controlling position based on voting rights. In addition, WeWork will not become a subsidiary of Softbank.
According to previous reports, WeWork also negotiated with a group of potential supporters represented by JP Morgan Chase to discuss funding of about $ 5 billion. But the latest news says that due to factors such as higher interest rates, negotiations have been blocked.
Analysts say that after the failure of the IPO (IPO), Softbank's investment advice has become another option for WeWork. According to the report, the Softbank investment plan will consist of debt and capital, including the issue of preferred shares without voting rights. WeWork is also expected to make a decision soon.
At the end of September, WeWork announced that it would withdraw the IPO prospectus submitted to the US Securities and Exchange Commission (SEC) as the company postponed the listing plan. According to media reports, WeWork postponed the IPO, mainly because the valuation presented on the open market is much lower than the valuation of private equity financing before WeWork.
For WeWork, which is losing out on the market, there is an urgent need for a new capital injection. The IPO prospectus shows that as of June 30 this year, WeWork has about $ 2.5 billion in cash. According to a study by Alliance Bernstein, an asset management company, according to WeWork’s current trajectory, the company's cash will be burned in the second quarter of next year. Recently, there have been reports in the media that, in the absence of new capital injections, WeWork may use cash before the end of this year.