A US&nbsp; bankruptcy judge authorised WeWork's Chapter 11 bankruptcy plan on Thursday, allowing the unstable shared office space provider to discharge $4 billion in debt and transfer stock to a group of lenders and real estate technology business Yardi Systems.

WeWork's restructuring was approved by US Bankruptcy Judge John Sherwood during a court hearing in Newark, New Jersey. The clearance allows WeWork to emerge from bankruptcy debt-free "in a matter of days," according to the company's attorney, Steven Serajeddini.

In November 2023, the flexible workspace provider filed for bankruptcy after rapidly expanding but incurring considerable losses due to an overly large real estate portfolio. WeWork's Chapter 11 filing has enabled it to renegotiate future rent rates with landlords, cancelling contracts at about one-third of its facilities and reducing future rent liabilities by more than $12 billion.

Following its bankruptcy, WeWork intends to operate 337 shared office spaces, with over 170 in the United States and Canada.&nbsp;

"Due to the tireless efforts of our team, and the unwavering loyalty of so many of our members, we have completed our Chapter 11 proceedings with success well beyond our initial expectations," stated David Tolley, CEO of WeWork.

WeWork rejected a competing buyout proposal from co-founder and former CEO Adam Neumann, claiming that his offer was insufficient to persuade the company's lenders, who preferred an equity interest as part of the restructuring plan. Existing equity shares will be cancelled because of the restructuring, but SoftBank, WeWork's largest stakeholder, will retain a minority ownership holding due to loans it made to the company. WeWork was once valued at $47 billion; its post-bankruptcy equity is estimated to be at $750 million.

Despite its quick growth, WeWork never achieved profitability, and its reputation suffered after a failed initial public offering in 2019. The proposed IPO failed as investors expressed worries about the company's significant losses and questioned Neumann's management and corporate governance.

WeWork eventually went public in October 2021 through a merger with a special purpose acquisition company (SPAC), but its financial problems were exacerbated when the COVID-19 pandemic caused a long-term drop in demand for office space and a substantial move toward remote working.

(With inputs from Reuters)

A US bankruptcy judge authorised WeWork's Chapter 11 bankruptcy plan on Thursday, allowing the unstable shared office space provider to discharge $4 billion in debt and transfer stock to a group of lenders and real estate technology business Yardi Systems.

A US bankruptcy judge authorised WeWork's Chapter 11 bankruptcy plan on Thursday, allowing the unstable shared office space provider to discharge $4 billion in debt and transfer stock to a group of lenders and real estate technology business Yardi Systems. WeWork's restructuring was approved by US Bankruptcy Judge John Sherwood during a court hearing in Newark, New Jersey. The clearance allows WeWork to emerge from bankruptcy debt-free "in a matter of days," according to the company's attorney, Steven Serajeddini. In November 2023, the flexible workspace provider filed for bankruptcy after rapidly expanding but incurring considerable losses due to an overly large real estate portfolio. WeWork's Chapter 11 filing has enabled it to renegotiate future rent rates with landlords, cancelling contracts at about one-third of its facilities and reducing future rent liabilities by more than $12 billion. Following its bankruptcy, WeWork intends to operate 337 shared office spaces, with over 170 in the United States and Canada. "Due to the tireless efforts of our team, and the unwavering loyalty of so many of our members, we have completed our Chapter 11 proceedings with success well beyond our initial expectations," stated David Tolley, CEO of WeWork. WeWork rejected a competing buyout proposal from co-founder and former CEO Adam Neumann, claiming that his offer was insufficient to persuade the company's lenders, who preferred an equity interest as part of the restructuring plan. Existing equity shares will be cancelled because of the restructuring, but SoftBank, WeWork's largest stakeholder, will retain a minority ownership holding due to loans it made to the company. WeWork was once valued at $47 billion; its post-bankruptcy equity is estimated to be at $750 million. Despite its quick growth, WeWork never achieved profitability, and its reputation suffered after a failed initial public offering in 2019. The proposed IPO failed as investors expressed worries about the company's significant losses and questioned Neumann's management and corporate governance. WeWork eventually went public in October 2021 through a merger with a special purpose acquisition company (SPAC), but its financial problems were exacerbated when the COVID-19 pandemic caused a long-term drop in demand for office space and a substantial move toward remote working. (With inputs from Reuters)

US Judge approves WeWork's chapter 11 bankruptcy plan

SoftBank Group reported a $5.2 billion quarterly loss on Thursday, marking its fourth consecutive quarter in the red. According to Reuters, the Japanese conglomerate, led by founder Masayoshi Son, grappled with the aftermath of the WeWork tragedy, once considered one of its most promising investments. &nbsp;

WeWork, the office-sharing start-up that once boasted a valuation of $47 billion, filed for U.S. bankruptcy protection on Monday, underscoring the challenges inherent in SoftBank's strategy of placing substantial bets on often precarious start-ups.&nbsp;

The financial results revealed a stark contrast from the previous year, with SoftBank reporting a net loss of 789 billion yen ($5.2 billion) for the three months ending in September. This downturn followed a 3.0 trillion profit a year earlier, when the company sold a significant portion of its stake in Chinese e-commerce giant Alibaba. &nbsp;

Notably, SoftBank recorded losses amounting to 234.4 billion yen in the first half of the year, directly linked to its exposure to WeWork's financial troubles.&nbsp;

Reuters cited Chief Financial Officer Yoshimitsu Goto, who expressed regret over WeWork's bankruptcy, labelling it a "great shame" at a briefing. Goto acknowledged the necessity for SoftBank to analyse and learn from the WeWork situation to enhance its future investment decisions. &nbsp;

However, he maintained a degree of optimism, stating that he believed SoftBank had "hit the bottom" and was on a path towards profitability. Goto identified chip designer Arm, which went public during the quarter, as the potential catalyst for SoftBank's recovery, recording a capital surplus of $4.65 billion from the listing's proceeds.&nbsp;

After a defensive posture in recent times, SoftBank signalled a shift back to a more active investing role, particularly focusing on artificial intelligence. Goto outlined the company's intention to engage in more proactive investment activities, indicating a strategic pivot in response to the challenges faced in the wake of WeWork's downfall.&nbsp;

(With inputs from Reuters)&nbsp;

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SoftBank Group reported a $5.2 billion quarterly loss on Thursday, marking its fourth consecutive quarter in the red. According to Reuters, the Japanese conglomerate, led by founder Masayoshi Son, grappled with the aftermath of the WeWork tragedy, once considered one of its most promising investments.

SoftBank Group reported a $5.2 billion quarterly loss on Thursday, marking its fourth consecutive quarter in the red. According to Reuters, the Japanese conglomerate, led by founder Masayoshi Son, grappled with the aftermath of the WeWork tragedy, once considered one of its most promising investments. WeWork, the office-sharing start-up that once boasted a valuation of $47 billion, filed for U.S. bankruptcy protection on Monday, underscoring the challenges inherent in SoftBank's strategy of placing substantial bets on often precarious start-ups. The financial results revealed a stark contrast from the previous year, with SoftBank reporting a net loss of 789 billion yen ($5.2 billion) for the three months ending in September. This downturn followed a 3.0 trillion profit a year earlier, when the company sold a significant portion of its stake in Chinese e-commerce giant Alibaba. Notably, SoftBank recorded losses amounting to 234.4 billion yen in the first half of the year, directly linked to its exposure to WeWork's financial troubles. Reuters cited Chief Financial Officer Yoshimitsu Goto, who expressed regret over WeWork's bankruptcy, labelling it a "great shame" at a briefing. Goto acknowledged the necessity for SoftBank to analyse and learn from the WeWork situation to enhance its future investment decisions. However, he maintained a degree of optimism, stating that he believed SoftBank had "hit the bottom" and was on a path towards profitability. Goto identified chip designer Arm, which went public during the quarter, as the potential catalyst for SoftBank's recovery, recording a capital surplus of $4.65 billion from the listing's proceeds. After a defensive posture in recent times, SoftBank signalled a shift back to a more active investing role, particularly focusing on artificial intelligence. Goto outlined the company's intention to engage in more proactive investment activities, indicating a strategic pivot in response to the challenges faced in the wake of WeWork's downfall. (With inputs from Reuters) WATCH WION LIVE HERE

SoftBank faces $5.2 billion quarterly loss amid WeWork woes

WeWork, the SoftBank Group-backed office-sharing start-up that was formerly deemed the most valuable start-up in the United States, filed for bankruptcy protection on November 6.&nbsp;

How did a company, that had once commanded a $47 billion valuation, end up grappling with a debt pile and soaring losses?&nbsp;

Let’s find out.&nbsp;

The beginnings &nbsp;

It was during the early 2010s that WeWork emerged as a groundbreaking force in the office space sector, founded by Adam Neumann and his wife Miguel McKelvey. Their approach aimed at providing shared workspaces that was tailored for the evolving needs of freelancers, start-ups, and businesses seeking flexible office solutions. &nbsp;

The business model, built on long-term leases, property renovation, and short-term client leasing, found fertile ground in an era of low-interest rates. WeWork's valuation witnessed an exponential surge from $1 billion in 2014 to$47 billion in 2019, driven by strategic investments, particularly from SoftBank Group.&nbsp;

The meteoric rise&nbsp;

WeWork's meteoric ascent was characterised by a disruptive model—long-term leases on expansive properties, transformed and sublet for short-term clients. The pivotal SoftBank investment in 2017 not only propelled WeWork to unicorn status but set the stage for an eagerly anticipated IPO. &nbsp;

However, the watershed year of 2019 brought unprecedented scrutiny. Concerns surrounding Adam Neumann's leadership style, extravagant spending, and conflicts of interest led to his resignation. The COVID-19 pandemic in 2020 proved to be crucible, testing WeWork's shared-space paradigm and prompting adaptations to a rapidly changing work landscape.&nbsp;

The tipping point&nbsp;

In an ambitious bid to regain investor trust, WeWork executed a SPAC (Special Purpose Acquisition Companies) merger in 2021, strategically focusing on key markets and larger corporate clients. However, the market cap, once soaring at $9 billion, plummeted to under half a billion dollars. &nbsp;

Simultaneously, the disclosure of $11.4 billion in net losses from 2020 to June 30, 2023, painted a stark financial picture. Criticism of WeWork's business practices intensified, with accusations of "renting long and subleasing short," exposing the company to significant risks. The post-pandemic landscape brought about challenges ranging from excess supply and softer demand to heightened competition and macroeconomic volatility.&nbsp;

The bankruptcy bombshell&nbsp;

By November 1, 2023, WeWork faced the stark reality of Chapter 11 bankruptcy, as it laid bare in its comprehensive bankruptcy documents. The downfall of WeWork, encompassing missteps in governance, financial management, and susceptibility to the evolving dynamics of the commercial real estate industry, stands as a cautionary tale for the start-up sector.&nbsp;

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WeWork, the SoftBank Group-backed office-sharing start-up that was formerly deemed the most valuable start-up in the United States, filed for bankruptcy protection on November 6.

WeWork, the SoftBank Group-backed office-sharing start-up that was formerly deemed the most valuable start-up in the United States, filed for bankruptcy protection on November 6. How did a company, that had once commanded a $47 billion valuation, end up grappling with a debt pile and soaring losses? Let’s find out. The beginnings It was during the early 2010s that WeWork emerged as a groundbreaking force in the office space sector, founded by Adam Neumann and his wife Miguel McKelvey. Their approach aimed at providing shared workspaces that was tailored for the evolving needs of freelancers, start-ups, and businesses seeking flexible office solutions. The business model, built on long-term leases, property renovation, and short-term client leasing, found fertile ground in an era of low-interest rates. WeWork's valuation witnessed an exponential surge from $1 billion in 2014 to$47 billion in 2019, driven by strategic investments, particularly from SoftBank Group. The meteoric rise WeWork's meteoric ascent was characterised by a disruptive model—long-term leases on expansive properties, transformed and sublet for short-term clients. The pivotal SoftBank investment in 2017 not only propelled WeWork to unicorn status but set the stage for an eagerly anticipated IPO. However, the watershed year of 2019 brought unprecedented scrutiny. Concerns surrounding Adam Neumann's leadership style, extravagant spending, and conflicts of interest led to his resignation. The COVID-19 pandemic in 2020 proved to be crucible, testing WeWork's shared-space paradigm and prompting adaptations to a rapidly changing work landscape. The tipping point In an ambitious bid to regain investor trust, WeWork executed a SPAC (Special Purpose Acquisition Companies) merger in 2021, strategically focusing on key markets and larger corporate clients. However, the market cap, once soaring at $9 billion, plummeted to under half a billion dollars. Simultaneously, the disclosure of $11.4 billion in net losses from 2020 to June 30, 2023, painted a stark financial picture. Criticism of WeWork's business practices intensified, with accusations of "renting long and subleasing short," exposing the company to significant risks. The post-pandemic landscape brought about challenges ranging from excess supply and softer demand to heightened competition and macroeconomic volatility. The bankruptcy bombshell By November 1, 2023, WeWork faced the stark reality of Chapter 11 bankruptcy, as it laid bare in its comprehensive bankruptcy documents. The downfall of WeWork, encompassing missteps in governance, financial management, and susceptibility to the evolving dynamics of the commercial real estate industry, stands as a cautionary tale for the start-up sector. WATCH WION LIVE HERE

Flashback Friday: WeWork unravelled – From billion-dollar valuation to bankruptcy 

Flexible workspace provider WeWork filed for bankruptcy protection on Monday due to high debt and losses from lower demand for office space.

WeWork, once valued at $47 billion, attracted blue-chip investors like SoftBank, Benchmark, and major Wall Street banks, including JPMorgan Chase.

What is WeWork?

Founded in 2010, WeWork aimed to revolutionise the office market by leasing large properties for longer periods and subletting them to multiple smaller businesses on more flexible, shorter arrangements. It was considered a disruptor in the industry due to its business model that was not hindered by property ownership. WeWork expanded rapidly, leading to an increase in revenue but also resulting in steep losses.

Who founded WeWork?

Adam Neumann, along with his wife Rebekah Neumann and Miguel McKelvey, co-founded WeWork, which grew to become the most valuable startup in the US, worth $47 billion. The company was famously associated with Adam Neumann's flamboyant personality and his vision of "elevating the world's consciousness."

Neumann's pursuit of rapid expansion, at the expense of profits, and his eccentric behaviour led to his removal and the failure of an IPO in 2019.

Just before filing for bankruptcy, Reuters quoted Neumann as saying, "With the right strategy and team, WeWork can successfully reorganise."

According to Steve Clayton, head of equity funds at Hargreaves Lansdown, the company was born during a boom, a time when investors tend to overlook warning signs. Clayton also pointed out that the term "charismatic CEO" should be a cause for concern among investors.&nbsp;

What led to the downfall of WeWork's success?

WeWork experienced a significant decline after SoftBank founder Masayoshi Son made extravagant predictions about its future prospects.

In 2019, WeWork attempted to launch an IPO with Neumann as CEO. We Company, its parent, spent several months preparing for the public offering.

However, the proposed share sale failed miserably after investors raised concerns about the company's large losses and were hesitant due to Neumann's management style and corporate governance shortcomings.

By October 2021, WeWork's value had plummeted to $10 billion before going public via a merger with a blank-check acquisition company.

The company's rise and fall was turned into a TV series called "WeCrashed," with Jared Leto as Neumann and Anne Hathaway as Rebekah.

Reasons behind WeWork's decision to file for bankruptcy protection in the U.S.?

The company struggled with costly leases and the cancellation of agreements from corporate clients as a result of the COVID-19 pandemic. The rise of remote work caused a significant number of people to work from home, which further exacerbated the company's financial woes. Despite efforts to renegotiate leases and restructure debts, the company was unable to avoid bankruptcy.

"Innovative financial metrics are rarely truly innovative, instead being a way of disguising a lack of cash profits, and WeWork played that game for all it was worth," Reuters quoted Clayton.

As of the end of June, WeWork had $13.3 billion in long-term lease obligations – a crushing burden for the company given the post-COVID drop in demand for office space.

What are the future plans for the company?

WeWork announced on Monday that 92 per cent of its lenders have agreed to convert their secured debt into equity as part of a restructuring support agreement, which will eliminate approximately $3 billion of debt.

WeWork could use the U.S. bankruptcy code to terminate burdensome leases, according to a note from law firm Cadwalader, Wickersham &amp; Taft LLP to landlords in August on its website.

The commercial property lending market may face challenges in 2024 as vacancies are expected to increase due to weak demand and investor reluctance to invest, resulting in a sharp drop in overall real estate values.

(With inputs from Reuters)

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Flexible workspace provider WeWork filed for bankruptcy protection on Monday due to high debt and losses from lower demand for office space. WeWork, once valued at $47 billion, attracted blue-chip investors like SoftBank, Benchmark, and major Wall Street banks, including JPMorgan Chase.

Flexible workspace provider WeWork filed for bankruptcy protection on Monday due to high debt and losses from lower demand for office space. WeWork, once valued at $47 billion, attracted blue-chip investors like SoftBank, Benchmark, and major Wall Street banks, including JPMorgan Chase. What is WeWork? Founded in 2010, WeWork aimed to revolutionise the office market by leasing large properties for longer periods and subletting them to multiple smaller businesses on more flexible, shorter arrangements. It was considered a disruptor in the industry due to its business model that was not hindered by property ownership. WeWork expanded rapidly, leading to an increase in revenue but also resulting in steep losses. Who founded WeWork? Adam Neumann, along with his wife Rebekah Neumann and Miguel McKelvey, co-founded WeWork, which grew to become the most valuable startup in the US, worth $47 billion. The company was famously associated with Adam Neumann's flamboyant personality and his vision of "elevating the world's consciousness." Neumann's pursuit of rapid expansion, at the expense of profits, and his eccentric behaviour led to his removal and the failure of an IPO in 2019. Just before filing for bankruptcy, Reuters quoted Neumann as saying, "With the right strategy and team, WeWork can successfully reorganise." According to Steve Clayton, head of equity funds at Hargreaves Lansdown, the company was born during a boom, a time when investors tend to overlook warning signs. Clayton also pointed out that the term "charismatic CEO" should be a cause for concern among investors. What led to the downfall of WeWork's success? WeWork experienced a significant decline after SoftBank founder Masayoshi Son made extravagant predictions about its future prospects. In 2019, WeWork attempted to launch an IPO with Neumann as CEO. We Company, its parent, spent several months preparing for the public offering. However, the proposed share sale failed miserably after investors raised concerns about the company's large losses and were hesitant due to Neumann's management style and corporate governance shortcomings. By October 2021, WeWork's value had plummeted to $10 billion before going public via a merger with a blank-check acquisition company. The company's rise and fall was turned into a TV series called "WeCrashed," with Jared Leto as Neumann and Anne Hathaway as Rebekah. Reasons behind WeWork's decision to file for bankruptcy protection in the U.S.? The company struggled with costly leases and the cancellation of agreements from corporate clients as a result of the COVID-19 pandemic. The rise of remote work caused a significant number of people to work from home, which further exacerbated the company's financial woes. Despite efforts to renegotiate leases and restructure debts, the company was unable to avoid bankruptcy. "Innovative financial metrics are rarely truly innovative, instead being a way of disguising a lack of cash profits, and WeWork played that game for all it was worth," Reuters quoted Clayton. As of the end of June, WeWork had $13.3 billion in long-term lease obligations – a crushing burden for the company given the post-COVID drop in demand for office space. What are the future plans for the company? WeWork announced on Monday that 92 per cent of its lenders have agreed to convert their secured debt into equity as part of a restructuring support agreement, which will eliminate approximately $3 billion of debt. WeWork could use the U.S. bankruptcy code to terminate burdensome leases, according to a note from law firm Cadwalader, Wickersham & Taft LLP to landlords in August on its website. The commercial property lending market may face challenges in 2024 as vacancies are expected to increase due to weak demand and investor reluctance to invest, resulting in a sharp drop in overall real estate values. (With inputs from Reuters) WATCH WION LIVE HERE

Decoded: Cause of WeWork's failure & the company's next move

Adam Neumann is the co-founder and former CEO of WeWork, which once aimed to revolutionise people's way of working globally. However, the office-sharing company recently filed for Chapter 11 bankruptcy protection, marking a significant downfall.

Adam Neumann is the co-founder and former CEO of WeWork, which once aimed to revolutionise people's way of working globally. However, the office-sharing company recently filed for Chapter 11 bankruptcy protection, marking a significant downfall. Here's everything you need to know about Adam Neumann, the billionaire who continued to get wealthy while his company was making losses. Adam Neumann's Early Life & Education Born in southern Israel to medical student parents, Adam Neumann moved to New York after a stint in the Israeli Navy to pursue his dream of becoming an entrepreneur at the Zicklin School of Business at Baruch College. His first business was Krawlers, a company which manufactured and sold baby clothes. However, he turned his attention to real estate after realising that the company was not turning into a multi-million dollar business. The Rise & Fall of Adam Neumann at WeWork Adam Neumann founded WeWork in 2010 during the financial crash when scores of commercial properties in New York lay empty. He grabbed office space cheaply and used it to build co-working spaces. The business grew swiftly, and within a few years, WeWork established hundreds of sites in over two dozen countries. However, WeWork's rapid growth could not make a profit for the company. Despite that, Adam Neumann secured plenty of money from Silicon Valley to keep the company going. ALSO READ | Future of Work: Tech industry's mandate to bring back the 'office' He had massive ambitions for WeWork, including eradicating world hunger. However, his dreams were not limited to his company. He was a high-flying executive who boasted about his goal to become the first trillionaire and the president of the world. When the Japanese investment giant handed Neumann billions of dollars in funding, WeWork became one of the most valuable private companies in the world, with a valuation of $47 billion. The next step was to make the company public. That's when WeWork's IPO prospectus document revealed that Neumann, now a billionaire, borrowed hundreds of millions of dollars to fund his lavish lifestyles and secured debt against the value of company shares. After the Wall Street Journal published details of Neumann's fondness of private jets and marijuana, the investors wanted him out. In 2019, Neumann quit reluctantly. Adam Neumann's Net Worth Forbes' latest estimates say that Adam Neumann is worth $2.2 billion. In 2019, Neumann peaked at $4.1 billion before he quit WeWork. (With inputs from agencies) WATCH WION LIVE HERE

Who is Adam Neumann? Former CEO and co-founder of WeWork who quit before it went bankrupt

WeWork, the office-sharing start-up backed by SoftBank Group, which once held the title of the most valuable U.S. start-up, filed for&nbsp;bankruptcy protection, a Reuters report said on Monday.&nbsp;The company's rise and fall has had&nbsp;a profound impact on the global office sector, as it grappled with mounting challenges, including the impact of remote work on its business.&nbsp;

The decision to seek bankruptcy protection is yet another&nbsp;acknowledgment by SoftBank, the Japanese technology conglomerate that owns approximately 60 per cent of WeWork, that the company's survival depends on renegotiating its costly leases.

WeWork has struggled to achieve profitability, primarily due to its expensive leases and the shift in corporate clients' preferences towards remote work. &nbsp;

According to financial data from the second quarter of 2023, 74 per cent of WeWork's revenue was being consumed by lease payments. &nbsp;

In its bankruptcy filing, WeWork reported estimated assets and liabilities ranging from $10 billion to $50 billion. The company is now looking to leverage U.S. bankruptcy code provisions to free itself from heavy leases, as suggested by law firm Cadwalader, Wickersham &amp; Taft LLP in an August note to landlords. However, this move has left many landlords anticipating a significant impact on their rental income.&nbsp;

According to Reuters, founder Adam Neumann had led WeWork to an unprecedented valuation of $47 billion, attracting investments from esteemed institutions such as SoftBank, Benchmark, and Wall Street giants like JPMorgan Chase. &nbsp;

Neumann's emphasis on rapid expansion at the cost of profitability, coupled with revelations about his eccentric behaviour, ultimately led to his removal and the derailment of an initial public offering in 2019. This compelled SoftBank to double down on its investment and appoint real estate expert Sandeep Mathrani as CEO. In 2021, SoftBank attempted to take WeWork public via a merger with a blank-check acquisition company, valuing the firm at $8 billion.&nbsp;

Despite managing to amend 590 leases and save approximately $12.7 billion in fixed lease payments, WeWork could not overcome the challenges posed by the COVID-19 pandemic. Office workers continued to work from home, severely affecting WeWork's business model. With little incentive from struggling landlords to ease lease terms, WeWork found itself in an increasingly untenable situation.&nbsp;

Furthermore, WeWork's clientele, consisting of&nbsp;both large corporations and smaller businesses, reduced their spending amid soaring inflation and economic uncertainty. To compound its problems, WeWork faced stiff competition from its own landlords, as commercial property companies began offering shorter and more flexible leases to adapt to the evolving office sector.&nbsp;

Earlier this year, David Tolley, a former investment banker and private equity executive, succeeded Sandeep Mathrani as WeWork's CEO. Tolley, who had previously helped the debt-ridden satellite communications provider Intelsat emerge from bankruptcy, took the helm in an attempt to steer WeWork towards stability.

Despite engaging in debt restructurings and securing a seven-day extension on an interest payment from creditors just last week, WeWork found itself unable to avert the impending bankruptcy.&nbsp;

(With inputs from Reuters)&nbsp;

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WeWork, the office-sharing start-up backed by SoftBank Group, which once held the title of the most valuable U.S. start-up, filed for bankruptcy protection, a Reuters report said on Monday.

WeWork, the office-sharing start-up backed by SoftBank Group, which once held the title of the most valuable U.S. start-up, filed for bankruptcy protection, a Reuters report said on Monday. The company's rise and fall has had a profound impact on the global office sector, as it grappled with mounting challenges, including the impact of remote work on its business. The decision to seek bankruptcy protection is yet another acknowledgment by SoftBank, the Japanese technology conglomerate that owns approximately 60 per cent of WeWork, that the company's survival depends on renegotiating its costly leases. WeWork has struggled to achieve profitability, primarily due to its expensive leases and the shift in corporate clients' preferences towards remote work. According to financial data from the second quarter of 2023, 74 per cent of WeWork's revenue was being consumed by lease payments. In its bankruptcy filing, WeWork reported estimated assets and liabilities ranging from $10 billion to $50 billion. The company is now looking to leverage U.S. bankruptcy code provisions to free itself from heavy leases, as suggested by law firm Cadwalader, Wickersham & Taft LLP in an August note to landlords. However, this move has left many landlords anticipating a significant impact on their rental income. According to Reuters, founder Adam Neumann had led WeWork to an unprecedented valuation of $47 billion, attracting investments from esteemed institutions such as SoftBank, Benchmark, and Wall Street giants like JPMorgan Chase. Neumann's emphasis on rapid expansion at the cost of profitability, coupled with revelations about his eccentric behaviour, ultimately led to his removal and the derailment of an initial public offering in 2019. This compelled SoftBank to double down on its investment and appoint real estate expert Sandeep Mathrani as CEO. In 2021, SoftBank attempted to take WeWork public via a merger with a blank-check acquisition company, valuing the firm at $8 billion. Despite managing to amend 590 leases and save approximately $12.7 billion in fixed lease payments, WeWork could not overcome the challenges posed by the COVID-19 pandemic. Office workers continued to work from home, severely affecting WeWork's business model. With little incentive from struggling landlords to ease lease terms, WeWork found itself in an increasingly untenable situation. Furthermore, WeWork's clientele, consisting of both large corporations and smaller businesses, reduced their spending amid soaring inflation and economic uncertainty. To compound its problems, WeWork faced stiff competition from its own landlords, as commercial property companies began offering shorter and more flexible leases to adapt to the evolving office sector. Earlier this year, David Tolley, a former investment banker and private equity executive, succeeded Sandeep Mathrani as WeWork's CEO. Tolley, who had previously helped the debt-ridden satellite communications provider Intelsat emerge from bankruptcy, took the helm in an attempt to steer WeWork towards stability. Despite engaging in debt restructurings and securing a seven-day extension on an interest payment from creditors just last week, WeWork found itself unable to avert the impending bankruptcy. (With inputs from Reuters) WATCH WION LIVE HERE

WeWork, once a pinnacle of tech innovation, files for bankruptcy as challenges mount 

WION's Business Desk brings you this daily round up of global stories from the world of business and economy.&nbsp;

WeWork, once a pinnacle of tech innovation, files for bankruptcy as challenges mount&nbsp;

WeWork, the office-sharing start-up backed by SoftBank Group, which once held the title of the most valuable U.S. start-up, filed for bankruptcy protection, a Reuters report said on Monday. The company's rise and fall has had a profound impact on the global office sector, as it grappled with mounting challenges, including the impact of remote work on its business.&nbsp;

<a href="https://www.wionews.com/business-economy/wework-once-a-pinnacle-of-tech-innovation-files-for-bankruptcy-as-challenges-mount-655956">Read more here</a>

Mexican 'nearshoring' fosters optimism in business landscape&nbsp;

In Mexico, businesses, especially those in the real estate and construction sectors, are embracing the concept of "nearshoring" to drive profits and stimulate economic growth, primarily in industrial zones near the U.S. border. The Mexican government anticipates that nearshoring, characterised by moving manufacturing capacity closer to the U.S. market instead of Asia, could contribute up to 1.2 percentage points to the nation's economic growth, which is projected to reach 3.5 per cent this year.&nbsp;

<a href="https://www.wionews.com/business-economy/mexican-nearshoring-fosters-optimism-in-business-landscape-655964">Read more here</a>

Tesla plans to launch affordable 25,000-euro car in Germany: Media reports

Tesla, the electric vehicle pioneer, is reportedly gearing up to produce a more affordable electric car with a price tag of 25,000 euros (approximately $26,838) at its factory located near Berlin, a Reuters report said, citing an anonymous source familiar with the matter. The development signals a significant move for Tesla as it aims to promote wider adoption of its electric vehicles.&nbsp;

<a href="https://www.wionews.com/business-economy/tesla-plans-to-launch-affordable-25000-euro-car-in-germany-source-says-655965">Read more here</a>

Carbon Copies: Corporations racing to net zero, but few cross the finish line

A report by Net Zero Tracker reveals specific challenges faced by corporations. Only a fraction of companies extend their net-zero targets to encompass Scope 3 emissions, which are linked to a company's value chain. Furthermore, a limited number of firms have set quality thresholds for the use of carbon offsets in their sustainability strategies.

<a href="https://www.wionews.com/business-economy/carbon-copies-corporations-racing-to-net-zero-but-few-cross-the-finish-line-655975">Read more here</a>

Airbnb's Italian Job: Seizure of $835.5 million sparks tax evasion storm

An Italian judge has issued an order to seize $835.5 million from the short-term rental giant Airbnb on the grounds of alleged tax evasion. This move comes as prosecutors claim that Airbnb failed to collect a 21 per cent tax on roughly €3.7 billion of rental income, which landlords in Italy are obligated to pay.

<a href="here https://www.wionews.com/business-economy/airbnbs-italian-job-seizure-of-8355-million-sparks-tax-evasion-storm-655991">Read more here</a>

Byju's in advanced talks to sell EPIC to Joffre Capital for $400 million&nbsp;

Indian ed-tech company Byju's is reportedly in the final stages of discussions to sell its US-based children's digital reading platform, Epic! Creations, to private equity fund Joffre Capital for approximately $400 million. The move is seen as an effort to secure financial support and alleviate the company's ongoing financial challenges, according to Bloomberg sources.&nbsp;

<a href="https://www.wionews.com/business-economy/byjus-in-advanced-talks-to-sell-epic-to-joffre-capital-for-400-million-656004">Read more here</a>

IMF economists highlight Singapore's strong preference for remote work

A recent article by two economists in the Monetary Authority of Singapore's biannual report have highlighted the growing preference for remote work among Singapore's workforce. Analysis by International Monetary Fund (IMF) economists Shujaat Khan and Margaux MacDonald showed that over 70 per cent of Singaporean workers prefer remote work.&nbsp;

<a href="https://www.wionews.com/business-economy/imf-economists-highlight-singapores-strong-preference-for-remote-work-in-recent-analysis-656018">Read more here</a>

Citigroup considers significant job cuts in major restructuring: Report&nbsp;

Citigroup is reportedly contemplating substantial job reductions of at least 10 per cent in several of its major business segments as part of a comprehensive reorganisation effort led by CEO Jane Fraser, a CNBC report said citing sources. The internal initiative, known as "Project Bora Bora", is aimed at providing CEO Jane Fraser with more direct control as she endeavours to simplify Citigroup and enhance its stock performance.&nbsp;

<a href="https://www.wionews.com/business-economy/citigroup-considers-significant-job-cuts-in-major-restructuring-report-656007 ">Read more here</a>

Saab's becomes first foreign defence company to get government nod for 100pc FDI

In a landmark development, Swedish defence giant Saab has achieved a significant milestone by becoming the first foreign company to secure 100 per cent Foreign Direct Investment (FDI) approval for a defence project in India. According to The Economic Times, Saab has been given the green light to establish a new manufacturing facility in India, which will focus on producing shoulder-fired rockets.

<a href="https://www.wionews.com/business-economy/saabs-becomes-first-foreign-defence-company-to-get-government-nod-for-100pc-fdi-656050">Read more here</a>

Shocker ahead of Christmas: British consumer spending growth slows

Recent data from Barclays reveals a worrying trend in the spending habits of consumers in the United Kingdom. The data shows that there has been a slowdown in the growth of consumer spending, which is now at its lowest level in over a year.

<a href="https://www.wionews.com/business-economy/shocker-ahead-of-christmas-british-consumer-spending-growth-slows-656058">Read more here</a>

WION's Business Desk brings you this daily round up of global stories from the world of business and economy. WeWork, once a pinnacle of tech innovation, files for bankruptcy as challenges mount WeWork, the office-sharing start-up backed by SoftBank Group, which once held the title of the most valuable U.

WION's Business Desk brings you this daily round up of global stories from the world of business and economy. WeWork, once a pinnacle of tech innovation, files for bankruptcy as challenges mount WeWork, the office-sharing start-up backed by SoftBank Group, which once held the title of the most valuable U.S. start-up, filed for bankruptcy protection, a Reuters report said on Monday. The company's rise and fall has had a profound impact on the global office sector, as it grappled with mounting challenges, including the impact of remote work on its business. Read more here Mexican 'nearshoring' fosters optimism in business landscape In Mexico, businesses, especially those in the real estate and construction sectors, are embracing the concept of "nearshoring" to drive profits and stimulate economic growth, primarily in industrial zones near the U.S. border. The Mexican government anticipates that nearshoring, characterised by moving manufacturing capacity closer to the U.S. market instead of Asia, could contribute up to 1.2 percentage points to the nation's economic growth, which is projected to reach 3.5 per cent this year. Read more here Tesla plans to launch affordable 25,000-euro car in Germany: Media reports Tesla, the electric vehicle pioneer, is reportedly gearing up to produce a more affordable electric car with a price tag of 25,000 euros (approximately $26,838) at its factory located near Berlin, a Reuters report said, citing an anonymous source familiar with the matter. The development signals a significant move for Tesla as it aims to promote wider adoption of its electric vehicles. Read more here Carbon Copies: Corporations racing to net zero, but few cross the finish line A report by Net Zero Tracker reveals specific challenges faced by corporations. Only a fraction of companies extend their net-zero targets to encompass Scope 3 emissions, which are linked to a company's value chain. Furthermore, a limited number of firms have set quality thresholds for the use of carbon offsets in their sustainability strategies. Read more here Airbnb's Italian Job: Seizure of $835.5 million sparks tax evasion storm An Italian judge has issued an order to seize $835.5 million from the short-term rental giant Airbnb on the grounds of alleged tax evasion. This move comes as prosecutors claim that Airbnb failed to collect a 21 per cent tax on roughly €3.7 billion of rental income, which landlords in Italy are obligated to pay. Read more here Byju's in advanced talks to sell EPIC to Joffre Capital for $400 million Indian ed-tech company Byju's is reportedly in the final stages of discussions to sell its US-based children's digital reading platform, Epic! Creations, to private equity fund Joffre Capital for approximately $400 million. The move is seen as an effort to secure financial support and alleviate the company's ongoing financial challenges, according to Bloomberg sources. Read more here IMF economists highlight Singapore's strong preference for remote work A recent article by two economists in the Monetary Authority of Singapore's biannual report have highlighted the growing preference for remote work among Singapore's workforce. Analysis by International Monetary Fund (IMF) economists Shujaat Khan and Margaux MacDonald showed that over 70 per cent of Singaporean workers prefer remote work. Read more here Citigroup considers significant job cuts in major restructuring: Report Citigroup is reportedly contemplating substantial job reductions of at least 10 per cent in several of its major business segments as part of a comprehensive reorganisation effort led by CEO Jane Fraser, a CNBC report said citing sources. The internal initiative, known as "Project Bora Bora", is aimed at providing CEO Jane Fraser with more direct control as she endeavours to simplify Citigroup and enhance its stock performance. Read more here Saab's becomes first foreign defence company to get government nod for 100pc FDI In a landmark development, Swedish defence giant Saab has achieved a significant milestone by becoming the first foreign company to secure 100 per cent Foreign Direct Investment (FDI) approval for a defence project in India. According to The Economic Times, Saab has been given the green light to establish a new manufacturing facility in India, which will focus on producing shoulder-fired rockets. Read more here Shocker ahead of Christmas: British consumer spending growth slows Recent data from Barclays reveals a worrying trend in the spending habits of consumers in the United Kingdom. The data shows that there has been a slowdown in the growth of consumer spending, which is now at its lowest level in over a year. Read more here

Wion Business Wrap | WeWork's bankruptcy, Airbnb's troubles & more

The embattled flexible workspace provider, WeWork, is reportedly on the verge of filing for bankruptcy in the coming week, as per a Reuters reported. This revelation triggered a sharp decline in the company's stock, with shares plummeting 32 per cent in after-hours trading. In the last one year, its shares have slide by almost 96 per cent.

While the specific details of the bankruptcy filing remain undisclosed, reports suggest that WeWork is actively considering submitting a Chapter 11 petition in New Jersey, based on insider information cited by a Wall Street Journal report. &nbsp;

WeWork's financial turmoil has been brewing for some time, marked by its recent agreement with creditors to temporarily postpone payments on a portion of its substantial debt. This grace period is rapidly drawing to a close, increasing the pressure on the company.

At the heart of WeWork's financial difficulties lie its formidable long-term debt, which stood at $2.9 billion as of the end of June, and a staggering $13 billion tied up in long-term leases. These financial obligations have become increasingly burdensome as borrowing costs continue to rise, which in turn, has taken a toll on the entire commercial real estate sector.

In 2019, the company was privately valued at an astounding $47 billion. However, the company's plans to go public in the same year unravelled due to investor scepticism about its business model, which involved securing long-term leases and then renting them out for shorter periods, along with concerns about its financial losses. &nbsp;

WeWork eventually did go public in 2021 but at a much-reduced valuation. Throughout this time, WeWork's primary supporter, Japanese conglomerate SoftBank, continued to provide billions to the start-up, despite its ongoing financial struggles and losses.

In August, WeWork took the unprecedented step of casting "substantial doubt" on its ability to continue operations. Since then, the company's problems have only intensified, with several key executives, including CEO Sandeep Mathrani, departing this year.

(With inputs from Reuters)

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The embattled flexible workspace provider, WeWork, is reportedly on the verge of filing for bankruptcy in the coming week, as per a Reuters reported. This revelation triggered a sharp decline in the company's stock, with shares plummeting 32 per cent in after-hours trading.

The embattled flexible workspace provider, WeWork, is reportedly on the verge of filing for bankruptcy in the coming week, as per a Reuters reported. This revelation triggered a sharp decline in the company's stock, with shares plummeting 32 per cent in after-hours trading. In the last one year, its shares have slide by almost 96 per cent. While the specific details of the bankruptcy filing remain undisclosed, reports suggest that WeWork is actively considering submitting a Chapter 11 petition in New Jersey, based on insider information cited by a Wall Street Journal report. WeWork's financial turmoil has been brewing for some time, marked by its recent agreement with creditors to temporarily postpone payments on a portion of its substantial debt. This grace period is rapidly drawing to a close, increasing the pressure on the company. At the heart of WeWork's financial difficulties lie its formidable long-term debt, which stood at $2.9 billion as of the end of June, and a staggering $13 billion tied up in long-term leases. These financial obligations have become increasingly burdensome as borrowing costs continue to rise, which in turn, has taken a toll on the entire commercial real estate sector. In 2019, the company was privately valued at an astounding $47 billion. However, the company's plans to go public in the same year unravelled due to investor scepticism about its business model, which involved securing long-term leases and then renting them out for shorter periods, along with concerns about its financial losses. WeWork eventually did go public in 2021 but at a much-reduced valuation. Throughout this time, WeWork's primary supporter, Japanese conglomerate SoftBank, continued to provide billions to the start-up, despite its ongoing financial struggles and losses. In August, WeWork took the unprecedented step of casting "substantial doubt" on its ability to continue operations. Since then, the company's problems have only intensified, with several key executives, including CEO Sandeep Mathrani, departing this year. (With inputs from Reuters) WATCH WION LIVE HERE

WeWork nears bankruptcy amidst crushing debt and plummeting value

WeWork on Wednesday (September 6) announced that it has begun the process of engagement with landlords around the world for renegotiating almost all its leases, which led to its share prices shooting up as much as 9 per cent in morning trade. 
 
The SoftBank-backed company stated that it is aiming to negotiate with its landlords on favourable terms and has been planning to exit the underperforming and unfit locations so as to reinvest in its other assets. 
 
"We intend to remain in the majority of our buildings and markets," the company, in a statement, said. The office space group had earlier warned about “substantial doubt” in its ability to continue functioning as an ongoing concern.

ALSO READ |&nbsp;<a href="https://www.wionews.com/business-economy/wework-once-valued-at-47-billion-issues-bankruptcy-warning-624039">WeWork, once valued at $47 billion, issues bankruptcy&nbsp;warning</a>

The drive of the New York-based company to cut down lease costs has been stated as “dramatically out of step with current market conditions” which is threatening the commercial real estate industry, which is already under pressure due to excess capacity after work-from-home culture came in during the pandemic. 
 
Till June, WeWork had offices in 777 locations in 39 countries along with long-term lease obligations worth more than $13 billion, which are due in or after 2028.

<h2>Unfit and underperforming locations to be exited</h2>

The plan was announced by WeWork after the landlords were “strongly advised” to participate in a listen-only call on Wednesday morning, during which the important business update was shared. 
 
Chief Executive David Tolley informed the landlords about WeWork expecting to exit some “unfit and underperforming locations”, further stating that it is likely to remain in most of its buildings. 
 
After the call, Tolley in a statement said WeWork was “taking immediate action to permanently fix our inflexible and high-cost lease portfolio” that was described by him as a legacy of a “period of unsustainable hypergrowth”.

WATCH |&nbsp;WeWork on the brink of bankruptcy

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Meanwhile, the landlords are looking to reduce their exposure to a company which has an outsized share of the office market in cities like London and New York and has got on its payroll a series of bankruptcy experts in the last few weeks. 
 
“We’ve been approached by about 70 landlords since 2020 and have ended up taking over eight or nine (WeWork spaces). The approaches are accelerating right now,” stated Jamie Hodari, the chief executive of Industrious, an office space company. 
 
Hodari stated that calls from WeWork customers have “inundated” his company since it started raising concerns in August.

(With inputs from agencies)

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WeWork on Wednesday (September 6) announced that it has begun the process of engagement with landlords around the world for renegotiating almost all its leases, which led to its share prices shooting up as much as 9 per cent in morning trade.

WeWork on Wednesday (September 6) announced that it has begun the process of engagement with landlords around the world for renegotiating almost all its leases, which led to its share prices shooting up as much as 9 per cent in morning trade. The SoftBank-backed company stated that it is aiming to negotiate with its landlords on favourable terms and has been planning to exit the underperforming and unfit locations so as to reinvest in its other assets. "We intend to remain in the majority of our buildings and markets," the company, in a statement, said. The office space group had earlier warned about “substantial doubt” in its ability to continue functioning as an ongoing concern. ALSO READ | WeWork, once valued at $47 billion, issues bankruptcy warning The drive of the New York-based company to cut down lease costs has been stated as “dramatically out of step with current market conditions” which is threatening the commercial real estate industry, which is already under pressure due to excess capacity after work-from-home culture came in during the pandemic. Till June, WeWork had offices in 777 locations in 39 countries along with long-term lease obligations worth more than $13 billion, which are due in or after 2028. Unfit and underperforming locations to be exited The plan was announced by WeWork after the landlords were “strongly advised” to participate in a listen-only call on Wednesday morning, during which the important business update was shared. Chief Executive David Tolley informed the landlords about WeWork expecting to exit some “unfit and underperforming locations”, further stating that it is likely to remain in most of its buildings. After the call, Tolley in a statement said WeWork was “taking immediate action to permanently fix our inflexible and high-cost lease portfolio” that was described by him as a legacy of a “period of unsustainable hypergrowth”. WATCH | WeWork on the brink of bankruptcy Meanwhile, the landlords are looking to reduce their exposure to a company which has an outsized share of the office market in cities like London and New York and has got on its payroll a series of bankruptcy experts in the last few weeks. “We’ve been approached by about 70 landlords since 2020 and have ended up taking over eight or nine (WeWork spaces). The approaches are accelerating right now,” stated Jamie Hodari, the chief executive of Industrious, an office space company. Hodari stated that calls from WeWork customers have “inundated” his company since it started raising concerns in August. (With inputs from agencies) You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here. WATCH WION LIVE HERE

WeWork share prices shoot as it begins to renegotiate leases globally

This is a story of riches to rags. Once a darling of the startup world, WeWork is on the brink of bankruptcy. Once valued at 47 billion dollars, the company, which provides office co-working spaces, has now seen its share drop to zero.

WeWork on the brink of bankruptcy

The business anticipated current-quarter revenue of between $830 million and $855 million, below analysts' projections of $918.4 million, causing WeWork shares to decline 5.5% in morning trading.

Shares of Wework fell 5.5% in morning trade, issues glum revenue forecast

<a href="https://www.wionews.com/sports/silicon-valley-classic-naomi-osaka-makes-winning-return-sets-up-mouth-watering-clash-vs-coco-gauff-503148">Silicon Valley</a> has been shaken by news of Adam Neumann's new residential real estate business, Flow.

According to reports,<a href="https://www.wionews.com/business-economy/wework-co-founder-adam-neumann-secures-a-massive-funding-of-350-million-for-his-real-estate-startup-507675"> Neumann</a>, 43, is now in control of Flow, a billion dollar real estate firm, nearly three years after resigning from his position as CEO of WeWork over claims of mismanagement, a toxic workplace, and the company's failed IPO.

According to <meta charset="utf-8" /><a href="https://edition.cnn.com/2022/08/15/tech/adam-neumann-flow/index.html">CNN</a>, renowned venture capital firm Andreessen Horowitz declared on Monday that it would invest in Flow. A hefty amount of $350 million has been invested in the <a href="https://www.wionews.com/videos/india75-worlds-3rd-largest-startup-ecosystem-505593">startup</a> by Andreessen Horowitz. Even before it launched, the investment has valued the firm at more than $1 billion.&nbsp;The investment gives Flow a unicorn status (a term given only to 'startups' who have a valuation of over a billion). At present,&nbsp;Flow has a bare bones website, with the slogan 'Live life in flow' and two words stating it will launch in 2023.&nbsp;

There are little details available concerning Mr. Neumann's new business, Flow. In order to establish a "widely recognised residential brand, loaded with amenities," Mr. Neumann reportedly bought shares in more than 4,000 US units in January, according to the Wall Street Journal.

When the purchase was first announced, The <a href="https://www.wionews.com/world/amid-drought-conditions-us-to-cut-water-supplies-for-some-states-mexico-california-remains-unaffected-507588">New York</a> Times stated that Andreessen had contributed $350 million (£290 million), calling it "the largest individual cheque" the investment company had ever written for a start-up.

What really happened to WeWork?

The New York Times called the crash and burn of WeWork&nbsp;“an implosion unlike any other in the history of start-ups."

WeWork filed for an initial public offering (IPO) in 2019, riding the success wave. This also&nbsp;marked the start of its decline.

In order to support its unrestricted expansion going forward, WeWork hoped to generate more than $3.5 billion from the IPO. Neumann liquidated $700 million in stock prior to the IPO's scheduled launch, continuing his recent pattern of dubious decisions.

But when the We Company submitted its S-1 filing to go public, its huge losses were made public. Then, a lot of analysts expressed their significant concerns about WeWork's potential for future profitability and said they didn't think the brand would be valued at more than $20 billion. 
&nbsp;

<img alt="WeWork" data-entity-type="file" data-entity-uuid="ef4c6da9-7626-4f76-973b-ce2307289cc5" src="//cdn.wionews.com/sites/default/files/inline-images/we-work-chinatown-main.jpg" />

A WeWork co-working space in Washington DC.&nbsp;Photo credits: AFP

In September 2019, the IPO was postponed. The company was "besieged with criticism over its governance, business model, and ability to earn a profit.&nbsp;

Shortly after, SoftBank announced a $9.2 million write-down on its interests in WeWork.

On the terrible demise of the brand, The Guardian ran an article. The company's costly, inefficient business model as well as CEO Neumann's immoral and dubious activities were cited by reporter <a href="https://www.theguardian.com/business/2019/dec/20/why-wework-went-wrong">Matthew Zeitlin</a> as the primary causes of the brand's failure.

Following these problems, WeWork underwent a significant management shift. Neumann was asked to resign as CEO as a result of reaction from the botched IPO and an apparent loss of trust by SoftBank. In a nutshell, the co-working giant&nbsp;went from a $47 billion valuation to&nbsp;bankruptcy in just six weeks.&nbsp;

Outrage over the $350 million <a href="https://www.wionews.com/business-economy/explained-phenomenon-of-hyperbitconisation-could-become-a-reality-by-2050-507616">investment</a>

As reported by the BBC, the firm's endorsement has some investors scratching their heads at the lofty language around the plans, while others are using the incident as evidence of how much easier it is for white men to acquire money in the tech industry than it is for women and other underrepresented groups.

"There is a reason why this is making such waves.... Because of the size of the cheque, because of the unprecedented funding of somebody who has been popularised as an immoral business person, it creates a more emotional reaction," said Allison Byers who is the&nbsp;founder and chief executive of Scroobious, which aims to help start-ups led by under-represented groups find funding to the BBC.&nbsp;

She was only one of several who vented their anger about the investment on social media.&nbsp;"For anyone else, we're held to these impossible standards. That's the outrage," she posted.&nbsp;

Leslie Feinzaig, an investor and the founder and managing director of the venture capital firm Graham &amp; Walker, said the reported scale of the investment in a company that has not yet gone public seemed like a "gut punch" in that setting.

<img alt="Adam" data-entity-type="file" data-entity-uuid="b886ce5e-d584-480c-9433-670447cc2a52" src="//cdn.wionews.com/sites/default/files/inline-images/AP19226459972867-e1565830607206.jpg" />

Adam Neumann at the opening bell ceremony at Nasdaq in New York, January 2018. Photo credits: AP

"My immediate reaction was, 'Man, I wish women had the same opportunity to fail up as spectacularly as Adam Neumann has,'" said Ms Feinzaig, whose firm has focused on investing in firms founded by women.

Most importantly, there are doubts within the world of<a href="https://www.wionews.com/world/chinas-economy-falls-into-a-slumber-due-to-unexpected-covid-outbreaks-and-property-crisis-507133"> real estate</a>.&nbsp;

According to John Drachman, co-founder of reputable real estate company Waterford Property Co., there is still a great deal of scepticism in the sector regarding Mr. Neumann's most recent plans to shake up the market, where many of the top corporations in the nation are already participating.

"Adam can clearly convey a story and a vision, making him a fantastic salesperson. He was really effective in raising a significant amount of money for WeWork "says he.

However, in the realm of real estate, individuals continue to reserve judgement. "When this was released, there was a tonne of scepticism. Is this another instalment of WeWork, one could wonder. Time alone will tell, though."

&nbsp;

&nbsp;

Silicon Valley has been shaken by news of Adam Neumann's new residential real estate business, Flow. According to reports, Neumann, 43, is now in control of Flow, a billion dollar real estate firm, nearly three years after resigning from his position as CEO of WeWork over claims of mismanagement, a toxic workplace, and the company's failed IPO.

Silicon Valley has been shaken by news of Adam Neumann's new residential real estate business, Flow. According to reports, Neumann, 43, is now in control of Flow, a billion dollar real estate firm, nearly three years after resigning from his position as CEO of WeWork over claims of mismanagement, a toxic workplace, and the company's failed IPO. According to CNN, renowned venture capital firm Andreessen Horowitz declared on Monday that it would invest in Flow. A hefty amount of $350 million has been invested in the startup by Andreessen Horowitz. Even before it launched, the investment has valued the firm at more than $1 billion. The investment gives Flow a unicorn status (a term given only to 'startups' who have a valuation of over a billion). At present, Flow has a bare bones website, with the slogan 'Live life in flow' and two words stating it will launch in 2023. There are little details available concerning Mr. Neumann's new business, Flow. In order to establish a "widely recognised residential brand, loaded with amenities," Mr. Neumann reportedly bought shares in more than 4,000 US units in January, according to the Wall Street Journal. When the purchase was first announced, The New York Times stated that Andreessen had contributed $350 million (£290 million), calling it "the largest individual cheque" the investment company had ever written for a start-up. What really happened to WeWork? The New York Times called the crash and burn of WeWork “an implosion unlike any other in the history of start-ups." WeWork filed for an initial public offering (IPO) in 2019, riding the success wave. This also marked the start of its decline. In order to support its unrestricted expansion going forward, WeWork hoped to generate more than $3.5 billion from the IPO. Neumann liquidated $700 million in stock prior to the IPO's scheduled launch, continuing his recent pattern of dubious decisions. But when the We Company submitted its S-1 filing to go public, its huge losses were made public. Then, a lot of analysts expressed their significant concerns about WeWork's potential for future profitability and said they didn't think the brand would be valued at more than $20 billion. A WeWork co-working space in Washington DC. Photo credits: AFP In September 2019, the IPO was postponed. The company was "besieged with criticism over its governance, business model, and ability to earn a profit. Shortly after, SoftBank announced a $9.2 million write-down on its interests in WeWork. On the terrible demise of the brand, The Guardian ran an article. The company's costly, inefficient business model as well as CEO Neumann's immoral and dubious activities were cited by reporter Matthew Zeitlin as the primary causes of the brand's failure. Following these problems, WeWork underwent a significant management shift. Neumann was asked to resign as CEO as a result of reaction from the botched IPO and an apparent loss of trust by SoftBank. In a nutshell, the co-working giant went from a $47 billion valuation to bankruptcy in just six weeks. Outrage over the $350 million investment As reported by the BBC, the firm's endorsement has some investors scratching their heads at the lofty language around the plans, while others are using the incident as evidence of how much easier it is for white men to acquire money in the tech industry than it is for women and other underrepresented groups. "There is a reason why this is making such waves.... Because of the size of the cheque, because of the unprecedented funding of somebody who has been popularised as an immoral business person, it creates a more emotional reaction," said Allison Byers who is the founder and chief executive of Scroobious, which aims to help start-ups led by under-represented groups find funding to the BBC. She was only one of several who vented their anger about the investment on social media. "For anyone else, we're held to these impossible standards. That's the outrage," she posted. Leslie Feinzaig, an investor and the founder and managing director of the venture capital firm Graham & Walker, said the reported scale of the investment in a company that has not yet gone public seemed like a "gut punch" in that setting. Adam Neumann at the opening bell ceremony at Nasdaq in New York, January 2018. Photo credits: AP "My immediate reaction was, 'Man, I wish women had the same opportunity to fail up as spectacularly as Adam Neumann has,'" said Ms Feinzaig, whose firm has focused on investing in firms founded by women. Most importantly, there are doubts within the world of real estate. According to John Drachman, co-founder of reputable real estate company Waterford Property Co., there is still a great deal of scepticism in the sector regarding Mr. Neumann's most recent plans to shake up the market, where many of the top corporations in the nation are already participating. "Adam can clearly convey a story and a vision, making him a fantastic salesperson. He was really effective in raising a significant amount of money for WeWork "says he. However, in the realm of real estate, individuals continue to reserve judgement. "When this was released, there was a tonne of scepticism. Is this another instalment of WeWork, one could wonder. Time alone will tell, though."

Former WeWork CEO Adam Neumann secures $350 million in funding, sparking outrage

WeWork co-founder and former CEO Adam Neumann has secured a massive funding worth $350 million for his newly-floated residential real estate startup “Flow”. Neumann, who left his previous venture in 2019, secured the finances from venture capital powerhouse Andreessen Horowitz, The New York Times reported.

Neumann was the Chief Executive Officer at&nbsp;WeWork&nbsp;after starting it with Miguel McKelvey in 2010. However, he was asked to leave after the company failed to go public. The funding already puts his new company’s valuation at $1 billion.

Also Read |&nbsp;<a href="https://www.wionews.com/world/wework-founder-adam-neumann-removed-from-forbes-billionaire-list-255082">WeWork founder Adam Neumann removed from Forbes' billionaire list</a>

Andreessen Horowitz was founded in Silicon Valley by Marc Andreessen and Ben Horowitz in 2009. Earlier on Monday, Marc Andreessen praised Adam Neumann in a blog post on the Andreessen Horowitz website adding that they are “excited to partner with Adam Neumann and his colleagues on Flow”.

“Adam is a visionary leader who revolutionized the second largest asset class in the world — commercial real estate — by bringing community and brand to an industry in which neither existed before,” Andreessen wrote.&nbsp;

Andreessen’s post also claims that “United States has a housing crisis”. However, earlier reports say that Andreessen was opposed to a housing development plan in his city.

Neumann’s company will begin operations in 2023.

Also Read |&nbsp;<a href="https://www.wionews.com/entertainment/anne-hathaway-jared-leto-to-play-the-leads-in-wework-inspired-series-360235">Anne Hathaway, Jared Leto to play the leads in WeWork inspired series</a>

What will “Flow” do?

A New York Times&nbsp;report says that Flow is “effectively a service that landlords can team up with for their properties, somewhat similar to the way an owner of a hotel might contract with a branded hotel chain to operate the property.”

The report also says that Neumann has purchased more than 3,000 apartment units in Atlanta, Fort Lauderdale, Miami, and Nashville.

Andreessen’s post adds that the venture is on the path of “connecting people through transforming their physical spaces and building communities where people spend the most time: their homes.”

(With inputs from agencies)

&nbsp;

&nbsp;

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WeWork co-founder and former CEO Adam Neumann has secured a massive funding worth $350 million for his newly-floated residential real estate startup “Flow”. Neumann, who left his previous venture in 2019, secured the finances from venture capital powerhouse Andreessen Horowitz, The New York Times reported.

WeWork co-founder and former CEO Adam Neumann has secured a massive funding worth $350 million for his newly-floated residential real estate startup “Flow”. Neumann, who left his previous venture in 2019, secured the finances from venture capital powerhouse Andreessen Horowitz, The New York Times reported. Neumann was the Chief Executive Officer at WeWork after starting it with Miguel McKelvey in 2010. However, he was asked to leave after the company failed to go public. The funding already puts his new company’s valuation at $1 billion. Also Read | WeWork founder Adam Neumann removed from Forbes' billionaire list Andreessen Horowitz was founded in Silicon Valley by Marc Andreessen and Ben Horowitz in 2009. Earlier on Monday, Marc Andreessen praised Adam Neumann in a blog post on the Andreessen Horowitz website adding that they are “excited to partner with Adam Neumann and his colleagues on Flow”. “Adam is a visionary leader who revolutionized the second largest asset class in the world — commercial real estate — by bringing community and brand to an industry in which neither existed before,” Andreessen wrote. Andreessen’s post also claims that “United States has a housing crisis”. However, earlier reports say that Andreessen was opposed to a housing development plan in his city. Neumann’s company will begin operations in 2023. Also Read | Anne Hathaway, Jared Leto to play the leads in WeWork inspired series What will “Flow” do? A New York Times report says that Flow is “effectively a service that landlords can team up with for their properties, somewhat similar to the way an owner of a hotel might contract with a branded hotel chain to operate the property.” The report also says that Neumann has purchased more than 3,000 apartment units in Atlanta, Fort Lauderdale, Miami, and Nashville. Andreessen’s post adds that the venture is on the path of “connecting people through transforming their physical spaces and building communities where people spend the most time: their homes.” (With inputs from agencies)

WeWork co-founder Adam Neumann secures a massive funding of $350 million for his real estate startup

WeWork co-founder and former CEO Adam Neumann have received around $350 million in funding from top investment fund Andreessen Horowitz (a16z) for his upcoming new rental real estate business, called Flow.

Unicorn status to WeWork co-founder's startup 'Flow' gets pre-launch

SoftBank-backed office-sharing startup WeWork reported a first-quarter net loss of $2.06 billion, as it was hit by restructuring charges while it prepares to go public through a merger with a blank-check firm.

World Business Watch: WeWork reports quarterly loss of $2 bn ahead of public listing

WeWork is now in talks with BowX Acquisition Corp, a blank-check company that raised $420 million in August,

WeWork discloses $3.2 billion loss in 2020

Internet investor SoftBank Group said Saturday it reached a settlement with WeWork co-founder Adam Neumann and other investors in the office sharing giant, amid reports that the deal would give the ex-CEO an extra $50 million.

SoftBank Group did not release details of the agreement that puts to rest a bitter dispute emerging from the Japan-based firm's 2019 decision to bail out WeWork, once regarded as a soaring unicorn but which quickly spiralled into deep troubles as it lost cash and cancelled its eagerly waited share offering.

Under the deal, the Wall Street Journal reported, SoftBank Group would buy about $1.5 billion of stock from other investors, including nearly $500 million from Neumann, roughly a half of what it originally planned to buy.

But the deal would give the controversial founder a $50 million windfall, another $50 million to cover his legal fees and extend by five years a $430 million SoftBank Group loan, according to reports.

Neumann and WeWork investors had sued SoftBank claiming the investment firm breached its obligations by backing out of a $3 billion rescue plan.

"This agreement is the result of all parties coming to the table for the sake of doing what is best for the future of WeWork," Marcelo Claure, executive chairman of WeWork and chief operating officer of SoftBank Group.

"With this litigation behind us, we are fully focused on our mission to reimagine the workplace and continue to meet the growing demand for flexible space around the world." 
WeWork was a dazzling unicorn valued at $47 billion, and SoftBank's founder Masayoshi Son had openly hailed Neumann's vision.&nbsp;

But things began to unravel as the firm lost cash and cancelled its share offering, with the ex-CEO pushed out -- albeit with a generous package

Internet investor SoftBank Group said Saturday it reached a settlement with WeWork co-founder Adam Neumann and other investors in the office sharing giant, amid reports that the deal would give the ex-CEO an extra $50 million.

Internet investor SoftBank Group said Saturday it reached a settlement with WeWork co-founder Adam Neumann and other investors in the office sharing giant, amid reports that the deal would give the ex-CEO an extra $50 million. SoftBank Group did not release details of the agreement that puts to rest a bitter dispute emerging from the Japan-based firm's 2019 decision to bail out WeWork, once regarded as a soaring unicorn but which quickly spiralled into deep troubles as it lost cash and cancelled its eagerly waited share offering. Under the deal, the Wall Street Journal reported, SoftBank Group would buy about $1.5 billion of stock from other investors, including nearly $500 million from Neumann, roughly a half of what it originally planned to buy. But the deal would give the controversial founder a $50 million windfall, another $50 million to cover his legal fees and extend by five years a $430 million SoftBank Group loan, according to reports. Neumann and WeWork investors had sued SoftBank claiming the investment firm breached its obligations by backing out of a $3 billion rescue plan. "This agreement is the result of all parties coming to the table for the sake of doing what is best for the future of WeWork," Marcelo Claure, executive chairman of WeWork and chief operating officer of SoftBank Group. "With this litigation behind us, we are fully focused on our mission to reimagine the workplace and continue to meet the growing demand for flexible space around the world." WeWork was a dazzling unicorn valued at $47 billion, and SoftBank's founder Masayoshi Son had openly hailed Neumann's vision. But things began to unravel as the firm lost cash and cancelled its share offering, with the ex-CEO pushed out -- albeit with a generous package

SoftBank reaches deal with WeWork

Anne Hathaway and Jared Leto are set to work together in Apple's scripted series 'We Crashed' as the leads. The actors&nbsp;have signed on to star in Apple’s scripted WeWork project, which has been ordered to series at the streamer.

The series is based on the Wondery podcast of the same name. It is described as following the greed-filled rise and inevitable fall of WeWork, one of the world’s most valuable startups, and the narcissists whose chaotic love made it all possible.

Hathaway and Leto are both Oscar winners. Hathaway won the award for best-supporting actress for her role in the 2012 film version of “Les Misérables,” while Leto won for best-supporting actor for the 2013 drama “Dallas Buyers Club.” Both will serve as executive producers&nbsp;in addition to starring.

According to Variety, Lee Eisenberg and Drew Crevello will co-write and executive produce the series. Eisenberg previously co-created the hit Apple series “Little America,” on which he was also the showrunner. It was announced last year that Eisenberg had signed an overall deal with the streamer. John Requa and Glenn Ficarra will direct “WeCrashed” in addition to executive producing. Charlie Gogolak and Natalie Sandy will also serve as executive producers along with Emma Ludbrook via her and Leto’s Paradox production company. Apple Studios will produce, with Wondery executive producing.

WeWork was viewed as the next hot startup and was valued at nearly $50 billion at one time. However, the company pulled the plug on an initial public offering in September 2019 in the wake of revelations about the erratic management and personal enrichment of co-founder Adam Neumann, as well as questions about its business model and the role of funders like JPMorgan and Softbank. Neumann resigned from the company around this time, while Wework accepted a bailout from SoftBank in October.

Anne Hathaway and Jared Leto are set to work together in Apple's scripted series 'We Crashed' as the leads. The actors have signed on to star in Apple’s scripted WeWork project, which has been ordered to series at the streamer.

Anne Hathaway and Jared Leto are set to work together in Apple's scripted series 'We Crashed' as the leads. The actors have signed on to star in Apple’s scripted WeWork project, which has been ordered to series at the streamer. The series is based on the Wondery podcast of the same name. It is described as following the greed-filled rise and inevitable fall of WeWork, one of the world’s most valuable startups, and the narcissists whose chaotic love made it all possible. Hathaway and Leto are both Oscar winners. Hathaway won the award for best-supporting actress for her role in the 2012 film version of “Les Misérables,” while Leto won for best-supporting actor for the 2013 drama “Dallas Buyers Club.” Both will serve as executive producers in addition to starring. According to Variety, Lee Eisenberg and Drew Crevello will co-write and executive produce the series. Eisenberg previously co-created the hit Apple series “Little America,” on which he was also the showrunner. It was announced last year that Eisenberg had signed an overall deal with the streamer. John Requa and Glenn Ficarra will direct “WeCrashed” in addition to executive producing. Charlie Gogolak and Natalie Sandy will also serve as executive producers along with Emma Ludbrook via her and Leto’s Paradox production company. Apple Studios will produce, with Wondery executive producing. WeWork was viewed as the next hot startup and was valued at nearly $50 billion at one time. However, the company pulled the plug on an initial public offering in September 2019 in the wake of revelations about the erratic management and personal enrichment of co-founder Adam Neumann, as well as questions about its business model and the role of funders like JPMorgan and Softbank. Neumann resigned from the company around this time, while Wework accepted a bailout from SoftBank in October.

Anne Hathaway, Jared Leto to play the leads in WeWork inspired series

Keeping up the ho[es of survival alive the owner of WeWork has told employees yesterday that it has slashed the cash burn rate almost and a half from the end of last year and obtained a 1.1 BN dollar commitment in new financing from SoftBank.

WeWork gets $1.1 BN commitment by SoftBank | World News

Yesterday,&nbsp; We. 
 
Starting February 18, Mathrani will replace co-CEOs Sebastian Gunningham and Artie Minson.

Reuters reported that Mathrani will start working under WeWork’s Executive Chairman Marcelo Claure.

The co-CEOs Gunningham and Minson are expected to stay on-board the company roster for some more time, as WeWork undergoes a major transition.

The new CEO was appointed internally, ie, without an external executive search firm getting involved in the process. Reports say that a couple of search firms were considered initially but dropped.

<h6><img alt="pp" data-entity-type="file" data-entity-uuid="db86404e-6b91-44ae-9d3c-8a604ef62863" src="//cdn.wionews.com/sites/default/files/inline-images/Untitled%20design%20%284%29_27.jpg" /> 
A WeWork office is seen in New York City on July 19, 2019 | AFP</h6>

 
Mathrani previously served as the chief executive of Brookfield Properties' retail group, before which he served as an executive at real estate firms like Vornado Realty Trust.

In early December, Brookfield had announced the departure of Mathrani, with January 31 as his last day. 
 
WeWork co-founder Adam Neumann left the company in November after drawing criticism for his management style.

According to Reuters, WeWork’s IPO was removed last year and the company recorded a steep decrease in valuation, to less than $8 billion from $47 billion.

Also read:&nbsp;<a href="https://www.wionews.com/business-economy/softbanks-3-billion-wework-financing-talks-stall-with-japan-banks-sources-269735">SoftBank's $3 billion WeWork financing talks stall with Japan banks</a>

(With inputs from Reuters)

Yesterday, We. Starting February 18, Mathrani will replace co-CEOs Sebastian Gunningham and Artie Minson. Reuters reported that Mathrani will start working under WeWork’s Executive Chairman Marcelo Claure.

Yesterday, We. Starting February 18, Mathrani will replace co-CEOs Sebastian Gunningham and Artie Minson. Reuters reported that Mathrani will start working under WeWork’s Executive Chairman Marcelo Claure. The co-CEOs Gunningham and Minson are expected to stay on-board the company roster for some more time, as WeWork undergoes a major transition. The new CEO was appointed internally, ie, without an external executive search firm getting involved in the process. Reports say that a couple of search firms were considered initially but dropped. A WeWork office is seen in New York City on July 19, 2019 | AFP Mathrani previously served as the chief executive of Brookfield Properties' retail group, before which he served as an executive at real estate firms like Vornado Realty Trust. In early December, Brookfield had announced the departure of Mathrani, with January 31 as his last day. WeWork co-founder Adam Neumann left the company in November after drawing criticism for his management style. According to Reuters, WeWork’s IPO was removed last year and the company recorded a steep decrease in valuation, to less than $8 billion from $47 billion. Also read: SoftBank's $3 billion WeWork financing talks stall with Japan banks (With inputs from Reuters)

Sandeep Mathrani set to take over as WeWork CEO this month

<a href="https://www.wionews.com/business-economy/softbank-agrees-to-sell-50-stake-in-wag-labs-back-to-the-dog-walking-startup-267531">SoftBank </a>Group Corp's&nbsp;talks&nbsp;to secure $3&nbsp;billion&nbsp;from&nbsp;Japan's three biggest&nbsp;banks&nbsp;have&nbsp;stalled as the lenders have hit internal lending limits to the firm, two people said, complicating a $9.5&nbsp;billion&nbsp;rescue package for&nbsp;WeWork.

The&nbsp;Japanese technology conglomerate is now likely to enter the new year without the&nbsp;<a href="https://www.wionews.com/business-economy/wework-plans-to-lay-off-4000-staff-report-258004">WeWork</a>&nbsp;financing&nbsp;in place, the people said, adding the&nbsp;banks&nbsp;are also concerned about the risks involved in rescuing the US&nbsp;office-sharing startup.

Mizuho Financial Group Inc, Mitsubishi UFJ Financial Group Inc (MUFG) and Sumitomo Mitsui Financial Group Inc (SMFG) are seeking ways to provide the&nbsp;financing&nbsp;while offsetting exposure, the people said, declining to be identified because the information is not public.

SoftBank did not respond to a request for comment. Mizuho, MUFG and SMFG declined to comment.

One option is to use some of&nbsp;SoftBank's&nbsp;26 per cent stake in Chinese e-commerce major <a href="https://www.wionews.com/business-economy/alibaba-eyes-129-billion-hong-kong-ipo-after-setting-price-reports-263274">Alibaba Group</a> Holding Ltd as collateral, the people said.

"SoftBank is an important client so we want to do everything we can to help, but we have to consider our credit risk," said a senior banker.

The&nbsp;talks&nbsp;illustrate the difficulty SoftBank poses for&nbsp;Japan's&nbsp;banks. Founder Masayoshi Son's tech juggernaut has long been a lucrative source of corporate lending in the world's third-largest economy, where&nbsp;banks&nbsp;typically have to lend at ultra-low interest rates given years of deflation.

But&nbsp;SoftBank's&nbsp;growing debt and turmoil at major bet&nbsp;WeWork&nbsp;earlier this year also highlight the firm's higher risk profile.

"Banks&nbsp;cannot loosen their credit criteria only for SoftBank," said S&amp;P Global Ratings senior director Ryoji Yoshizawa.

Another option to spread the risk is a syndicated loan, Yoshizawa said, adding this would be time-consuming potentially delaying&nbsp;financing.

SoftBank in October said it would launch a $9.5&nbsp;billion&nbsp;bailout of&nbsp;WeWork&nbsp;after the cancellation of the startup's initial public offering due to investor concerns over its corporate governance and co-founder Adam Neumann's hard-partying ways.

Son has said he turned a blind eye to Neumann's management, but that the company is still a solid business.

The domestic bank deadlock led SoftBank to secure a $1.75&nbsp;billion&nbsp;line of credit from Goldman Sachs Group Inc, the people said.

Goldman Sachs declined to comment.

SoftBank has 5.5 trillion yen ($50.28&nbsp;billion) in outstanding bonds and another 4 trillion yen in bank loans, Refinitiv data showed. Its weighted average cost of debt is 3.7 per cent , the seventh-highest among all companies on the Nikkei 225 Stock Average.

Moody's calculations showed the conglomerate's interest coverage ratio is 1.3, meaning group income is enough to service its debt, with some leftover.

SoftBank Group Corp's talks to secure $3 billion from Japan's three biggest banks have stalled as the lenders have hit internal lending limits to the firm, two people said, complicating a $9.

SoftBank Group Corp's talks to secure $3 billion from Japan's three biggest banks have stalled as the lenders have hit internal lending limits to the firm, two people said, complicating a $9.5 billion rescue package for WeWork. The Japanese technology conglomerate is now likely to enter the new year without the WeWork financing in place, the people said, adding the banks are also concerned about the risks involved in rescuing the US office-sharing startup. Mizuho Financial Group Inc, Mitsubishi UFJ Financial Group Inc (MUFG) and Sumitomo Mitsui Financial Group Inc (SMFG) are seeking ways to provide the financing while offsetting exposure, the people said, declining to be identified because the information is not public. SoftBank did not respond to a request for comment. Mizuho, MUFG and SMFG declined to comment. One option is to use some of SoftBank's 26 per cent stake in Chinese e-commerce major Alibaba Group Holding Ltd as collateral, the people said. "SoftBank is an important client so we want to do everything we can to help, but we have to consider our credit risk," said a senior banker. The talks illustrate the difficulty SoftBank poses for Japan's banks. Founder Masayoshi Son's tech juggernaut has long been a lucrative source of corporate lending in the world's third-largest economy, where banks typically have to lend at ultra-low interest rates given years of deflation. But SoftBank's growing debt and turmoil at major bet WeWork earlier this year also highlight the firm's higher risk profile. "Banks cannot loosen their credit criteria only for SoftBank," said S&P Global Ratings senior director Ryoji Yoshizawa. Another option to spread the risk is a syndicated loan, Yoshizawa said, adding this would be time-consuming potentially delaying financing. SoftBank in October said it would launch a $9.5 billion bailout of WeWork after the cancellation of the startup's initial public offering due to investor concerns over its corporate governance and co-founder Adam Neumann's hard-partying ways. Son has said he turned a blind eye to Neumann's management, but that the company is still a solid business. The domestic bank deadlock led SoftBank to secure a $1.75 billion line of credit from Goldman Sachs Group Inc, the people said. Goldman Sachs declined to comment. SoftBank has 5.5 trillion yen ($50.28 billion) in outstanding bonds and another 4 trillion yen in bank loans, Refinitiv data showed. Its weighted average cost of debt is 3.7 per cent , the seventh-highest among all companies on the Nikkei 225 Stock Average. Moody's calculations showed the conglomerate's interest coverage ratio is 1.3, meaning group income is enough to service its debt, with some leftover.

SoftBank's $3 billion WeWork financing talks stall with Japan banks: Sources

Weeks after his billion-dollar bailout of WeWork, <a href="https://www.wionews.com/business-economy/softbanks-oyo-reveals-over-330-million-annual-loss-revenue-surges-valuation-report-264451">SoftBank</a> Group Corp's founder and CEO Masayoshi Son reiterated his belief in an instinct-led investing style, in a discussion with Alibaba Group Holding Inc's co-founder Jack Ma.

SoftBank owns 26 per cent&nbsp;of China's Alibaba, with its origin in a $20 million investment in 2000, and the stake is now worth more than the Japanese firm's market capitalization.

Son on Friday said the decision to invest in Alibaba was driven by a gut feeling.

Other entrepreneurs Son met at that time "did not have true belief in their heart. I can feel," Son said. "We are the same animal. We are both a little crazy," he said of long-time ally Ma.

Ma said Son initially tried to invest $50 million in the e-commerce firm, but that he declined saying it was too large a sum - part of a pattern of offering big cheques to company founders that continued with WeWork co-founder Adam Neumann.

Son's comments come weeks after he was forced to bail out office-sharing startup WeWork when Neumann's level of control over his firm and hard-partying ways chilled investor appetite and crashed plans for an initial public offering (IPO).

Son last month said he misjudged Neumann's character after <a href="https://www.wionews.com/business-economy/wework-plans-to-lay-off-4000-staff-report-258004">WeWork </a>formally The We Company and other sputtering bets saw his $100 billion Vision Fund report an $8.9 billion second-quarter operating loss.

The conversation at Tokyo University between two of Asia's most prominent tech entrepreneurs comes at a point of divergence in their careers, with 55-year-old Ma retiring as Alibaba's executive chairman in September and Son pledging to spend his sixth decade at the helm of his investment juggernaut.

Domestically, SoftBank hopes to drive commercialization of the emerging field of artificial intelligence (AI), announcing on Friday it will spend 20 billion yen ($184 million) over 10 years funding an AI research institute with Tokyo University.

Son "probably has the biggest guts in the world on doing investment," Ma told attendees to the conference.

"Too much guts, sometimes I lose a lot of money," Son responded.

With the highly leveraged SoftBank trying to raise funds for a second megafund in which it is currently the only investor, its stake in Alibaba is one possible source of funds.

"In my view, I have not achieved anything yet," Son said. "I'm still a challenger and every day I'm still fighting."

That approach contrasts with Ma, who stepped back from running Alibaba to focus on philanthropy.

Weeks after his billion-dollar bailout of WeWork, SoftBank Group Corp's founder and CEO Masayoshi Son reiterated his belief in an instinct-led investing style, in a discussion with Alibaba Group Holding Inc's co-founder Jack Ma.

Weeks after his billion-dollar bailout of WeWork, SoftBank Group Corp's founder and CEO Masayoshi Son reiterated his belief in an instinct-led investing style, in a discussion with Alibaba Group Holding Inc's co-founder Jack Ma. SoftBank owns 26 per cent of China's Alibaba, with its origin in a $20 million investment in 2000, and the stake is now worth more than the Japanese firm's market capitalization. Son on Friday said the decision to invest in Alibaba was driven by a gut feeling. Other entrepreneurs Son met at that time "did not have true belief in their heart. I can feel," Son said. "We are the same animal. We are both a little crazy," he said of long-time ally Ma. Ma said Son initially tried to invest $50 million in the e-commerce firm, but that he declined saying it was too large a sum - part of a pattern of offering big cheques to company founders that continued with WeWork co-founder Adam Neumann. Son's comments come weeks after he was forced to bail out office-sharing startup WeWork when Neumann's level of control over his firm and hard-partying ways chilled investor appetite and crashed plans for an initial public offering (IPO). Son last month said he misjudged Neumann's character after WeWork formally The We Company and other sputtering bets saw his $100 billion Vision Fund report an $8.9 billion second-quarter operating loss. The conversation at Tokyo University between two of Asia's most prominent tech entrepreneurs comes at a point of divergence in their careers, with 55-year-old Ma retiring as Alibaba's executive chairman in September and Son pledging to spend his sixth decade at the helm of his investment juggernaut. Domestically, SoftBank hopes to drive commercialization of the emerging field of artificial intelligence (AI), announcing on Friday it will spend 20 billion yen ($184 million) over 10 years funding an AI research institute with Tokyo University. Son "probably has the biggest guts in the world on doing investment," Ma told attendees to the conference. "Too much guts, sometimes I lose a lot of money," Son responded. With the highly leveraged SoftBank trying to raise funds for a second megafund in which it is currently the only investor, its stake in Alibaba is one possible source of funds. "In my view, I have not achieved anything yet," Son said. "I'm still a challenger and every day I'm still fighting." That approach contrasts with Ma, who stepped back from running Alibaba to focus on philanthropy.

SoftBank's Son sticks with gut-led investing in chat with Alibaba's Ma

Embattled office-sharing firm&nbsp;<a href="https://www.wionews.com/business-economy/wework-data-shows-growth-still-doubling-261004">WeWork</a>&nbsp;will&nbsp;lay&nbsp;off&nbsp;2,400&nbsp;employees&nbsp;worldwide, about a fifth of its workforce, as it struggles to reorganize amid mounting losses, the company announced Thursday.

The painful job cuts underscore the rapid decline of what had been one of America's most celebrated startups which put a mammoth footprint in the commercial real estate of major cities around the globe but recently had to cancel its debut on Wall Street.

The layoffs which began "weeks ago" were necessary "to create a more efficient organization," a&nbsp;WeWork&nbsp;spokesperson said in a statement.

The dismissed&nbsp;workers&nbsp;"will receive severance, continued benefits, and other forms of assistance to aid in their career transition."

The company told shareholders earlier this month it lost almost $1.3 billion in the third quarter, more than twice the losses recorded in the same period a year earlier.

As investors and analysts questioned the company's value,&nbsp;WeWork&nbsp;in September scrapped plans for an initial public offering, forced out chief executive Adam Neumann and took a bailout from Japan's SoftBank Group, a major investor.

Unconventional executive

Alex Cohen, a vice president at the real estate firm Compass in New York, told AFP that&nbsp;WeWork's payroll became bloated as it tried to keep services, space design, engineering and construction management,&nbsp;in house rather than outsourcing them.

"WeWork's 'growth at all costs' ethos meant they didn't have time or appropriate management to put in place the processes and organizational structures to enable their staff to efficiently service the business's relentless appetite for new locations," he said in an email.

Neumann stepped down from&nbsp;WeWork's board of directors with a $1.7 billion exit package while the company's value was slashed to $8 billion,&nbsp;a far cry from its $47 billion valuation at the start of this year and just a fraction of the sum envisioned as part of the failed IPO.

A source told AFP that Neumann will get $1 billion for his SoftBank shares, $500 million for reimbursements of personal debts and $185 million in consulting fees.

The unconventional entrepreneur had faced simmering questions over his management style, loose approach to corporate governance and allegations of self-dealing,&nbsp;not to mention a Wall Street Journal expose which laid out Neumann's drug and alcohol use and his aspiration to become the world's first trillionaire.

A former employee, Maria Bardhi, filed a labor a grievance in New York accusing Neumann of pregnancy discrimination, saying he referred to her maternity leave as "vacation" and "retirement."&nbsp;

The company also allegedly paid Bardhi's temporary replacement twice her salary and fired her six months after her return.

The&nbsp;<a href="https://www.wionews.com/business-economy/wework-plans-to-lay-off-4000-staff-report-258004">WeWork</a>&nbsp;debacle contributed to woes at SoftBank, which earlier this month announced its largest quarterly loss ever at $6.4 billion.

Masayoshi Son, SoftBank's chief executive, expressed remorse and acknowledged having misjudged both ride-hailing giant Uber and&nbsp;WeWork.

"My investment decisions were in many ways poor. I regret them deeply," he said.

Embattled office-sharing firm WeWork will lay off 2,400 employees worldwide, about a fifth of its workforce, as it struggles to reorganize amid mounting losses, the company announced Thursday.

Embattled office-sharing firm WeWork will lay off 2,400 employees worldwide, about a fifth of its workforce, as it struggles to reorganize amid mounting losses, the company announced Thursday. The painful job cuts underscore the rapid decline of what had been one of America's most celebrated startups which put a mammoth footprint in the commercial real estate of major cities around the globe but recently had to cancel its debut on Wall Street. The layoffs which began "weeks ago" were necessary "to create a more efficient organization," a WeWork spokesperson said in a statement. The dismissed workers "will receive severance, continued benefits, and other forms of assistance to aid in their career transition." The company told shareholders earlier this month it lost almost $1.3 billion in the third quarter, more than twice the losses recorded in the same period a year earlier. As investors and analysts questioned the company's value, WeWork in September scrapped plans for an initial public offering, forced out chief executive Adam Neumann and took a bailout from Japan's SoftBank Group, a major investor. Unconventional executive Alex Cohen, a vice president at the real estate firm Compass in New York, told AFP that WeWork's payroll became bloated as it tried to keep services, space design, engineering and construction management, in house rather than outsourcing them. "WeWork's 'growth at all costs' ethos meant they didn't have time or appropriate management to put in place the processes and organizational structures to enable their staff to efficiently service the business's relentless appetite for new locations," he said in an email. Neumann stepped down from WeWork's board of directors with a $1.7 billion exit package while the company's value was slashed to $8 billion, a far cry from its $47 billion valuation at the start of this year and just a fraction of the sum envisioned as part of the failed IPO. A source told AFP that Neumann will get $1 billion for his SoftBank shares, $500 million for reimbursements of personal debts and $185 million in consulting fees. The unconventional entrepreneur had faced simmering questions over his management style, loose approach to corporate governance and allegations of self-dealing, not to mention a Wall Street Journal expose which laid out Neumann's drug and alcohol use and his aspiration to become the world's first trillionaire. A former employee, Maria Bardhi, filed a labor a grievance in New York accusing Neumann of pregnancy discrimination, saying he referred to her maternity leave as "vacation" and "retirement." The company also allegedly paid Bardhi's temporary replacement twice her salary and fired her six months after her return. The WeWork debacle contributed to woes at SoftBank, which earlier this month announced its largest quarterly loss ever at $6.4 billion. Masayoshi Son, SoftBank's chief executive, expressed remorse and acknowledged having misjudged both ride-hailing giant Uber and WeWork. "My investment decisions were in many ways poor. I regret them deeply," he said.

WeWork to lay off 2,400 workers worldwide

Japan's SoftBank Corp plans to merge internet unit Yahoo Japan with messaging app operator Line Corp to create a $30 billion tech giant, as it strives better compete to with local rival Rakuten and US tech powerhouses.

The deal, which would combine the providers of two of Japan's top QR code payment services, offers SoftBank access to 164 million Line users and their data in Japan and Southeast Asia as it expands into services outside its core wireless business.

It also offers Line a deep-pocket patron who can offer its tech expertise, including potentially via the giant Vision Fund.

The deal comes as SoftBank Group founder Masayoshi Son battles to restore his reputation after a disastrous investment in office-sharing firm WeWork.

Telecoms firm SoftBank Corp said in a statement that Yahoo Japan, which last month changed its name to Z Holdings Corp, would aim to complete its merger with Line, owned by South Korea's Naver Corp, in October 2020.

The companies plan to reach a definitive agreement by next month in a transaction that would see SoftBank Corp and Naver form a 50:50 venture that would control Z Holdings, which in turn would operate Yahoo Japan and Line.

SoftBank Corp and Naver, which owns 73 per cent of money-losing Line, plan to launch a tender offer for Line's remaining shares at 5,200 yen each - a 13.4 per cent&nbsp;premium to the shares' price before news of the merger broke. That values Line at about $12 billion.

Line's shares closed up 2.2 per cent&nbsp;at 5,150 yen after the announcement. Shares in Z Holdings rose 1.2 per cent, with Naver's shares up 2.9 per cent&nbsp;and SoftBank Corp's down 0.3 per cent.

Line has been looking for growth through expansion into areas such as QR code payments with Line Pay but has been squeezed because of its limited funds and heavy-spending peers including SoftBank, which has a rival service called PayPay.

The merger of Japan's most popular messaging app and one of the country's top online retailers is the latest consolidation in its tech industry and comes as Rakuten is expanding into SoftBank's core business with the launch of mobile services.

SoftBank this month completed its acquisition of online fashion retailer Zozo Inc, whose founder and ex-Chief Executive Yusaku Maezawa sold down his stake following a series of missteps.

The merger is driven by the two companies' "sense of crisis" over the rise of tech giants from the U.S. and China, Line CEO Takeshi Idezawa told a news conference, wearing a tie in Yahoo Japan's red corporate colour.

SoftBank Group's Son frequently laments Japan's tardiness in emerging fields like artificial intelligence, with Monday's presentation showing even after combining the company's research and development budget would be dwarfed by overseas rivals.

Yahoo Japan CEO Kentaro Kawabe, who was wearing a tie in Line's corporate green, declined to comment on which services would be combined or abolished post-merger.

Line launched to overcome downed networks in the aftermath of a 2011 earthquake and tsunami before building a strong following with its use of colourful emojis, eventually listing in 2016.

However, the messaging service struggled to make inroads in countries dominated by apps like Facebook's Whatapp and eventually retrenched in its core markets of Japan, Taiwan, Thailand and Indonesia.

Coming at a time of heightened political tension between Japan and South Korea, the merger might be the two countries' most significant economic cooperation of the last decade, Jaewoong Lee, a South Korean serial entrepreneur and founder of Naver rival Daum wrote on his Facebook page late on Sunday.

Z Holdings will continue to be a consolidated subsidiary of SoftBank Corp, which is a unit of investment conglomerate SoftBank Group Corp.

SoftBank retained Mizuho Securities, a unit of Mizuho Financial Group, as its financial advisor. Naver retained Deutsche Bank.

Japan's SoftBank Corp plans to merge internet unit Yahoo Japan with messaging app operator Line Corp to create a $30 billion tech giant, as it strives better compete to with local rival Rakuten and US tech powerhouses.

Japan's SoftBank Corp plans to merge internet unit Yahoo Japan with messaging app operator Line Corp to create a $30 billion tech giant, as it strives better compete to with local rival Rakuten and US tech powerhouses. The deal, which would combine the providers of two of Japan's top QR code payment services, offers SoftBank access to 164 million Line users and their data in Japan and Southeast Asia as it expands into services outside its core wireless business. It also offers Line a deep-pocket patron who can offer its tech expertise, including potentially via the giant Vision Fund. The deal comes as SoftBank Group founder Masayoshi Son battles to restore his reputation after a disastrous investment in office-sharing firm WeWork. Telecoms firm SoftBank Corp said in a statement that Yahoo Japan, which last month changed its name to Z Holdings Corp, would aim to complete its merger with Line, owned by South Korea's Naver Corp, in October 2020. The companies plan to reach a definitive agreement by next month in a transaction that would see SoftBank Corp and Naver form a 50:50 venture that would control Z Holdings, which in turn would operate Yahoo Japan and Line. SoftBank Corp and Naver, which owns 73 per cent of money-losing Line, plan to launch a tender offer for Line's remaining shares at 5,200 yen each - a 13.4 per cent premium to the shares' price before news of the merger broke. That values Line at about $12 billion. Line's shares closed up 2.2 per cent at 5,150 yen after the announcement. Shares in Z Holdings rose 1.2 per cent, with Naver's shares up 2.9 per cent and SoftBank Corp's down 0.3 per cent. Line has been looking for growth through expansion into areas such as QR code payments with Line Pay but has been squeezed because of its limited funds and heavy-spending peers including SoftBank, which has a rival service called PayPay. The merger of Japan's most popular messaging app and one of the country's top online retailers is the latest consolidation in its tech industry and comes as Rakuten is expanding into SoftBank's core business with the launch of mobile services. SoftBank this month completed its acquisition of online fashion retailer Zozo Inc, whose founder and ex-Chief Executive Yusaku Maezawa sold down his stake following a series of missteps. The merger is driven by the two companies' "sense of crisis" over the rise of tech giants from the U.S. and China, Line CEO Takeshi Idezawa told a news conference, wearing a tie in Yahoo Japan's red corporate colour. SoftBank Group's Son frequently laments Japan's tardiness in emerging fields like artificial intelligence, with Monday's presentation showing even after combining the company's research and development budget would be dwarfed by overseas rivals. Yahoo Japan CEO Kentaro Kawabe, who was wearing a tie in Line's corporate green, declined to comment on which services would be combined or abolished post-merger. Line launched to overcome downed networks in the aftermath of a 2011 earthquake and tsunami before building a strong following with its use of colourful emojis, eventually listing in 2016. However, the messaging service struggled to make inroads in countries dominated by apps like Facebook's Whatapp and eventually retrenched in its core markets of Japan, Taiwan, Thailand and Indonesia. Coming at a time of heightened political tension between Japan and South Korea, the merger might be the two countries' most significant economic cooperation of the last decade, Jaewoong Lee, a South Korean serial entrepreneur and founder of Naver rival Daum wrote on his Facebook page late on Sunday. Z Holdings will continue to be a consolidated subsidiary of SoftBank Corp, which is a unit of investment conglomerate SoftBank Group Corp. SoftBank retained Mizuho Securities, a unit of Mizuho Financial Group, as its financial advisor. Naver retained Deutsche Bank.

SoftBank to create $30 billion tech giant with Yahoo Japan, Line Corp merger

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