SoftBank has agreed to give him (Neumann) $500 million to refinance his personal loans, as well as pay him a $185 million consulting fee. SoftBank will additionally launch a tender offer for up to $3 billion to acquire WeWork shares from existing investors and employees.. Neumann’s ability to tender his shares will be capped at $970 million.
https://www.reuters.com/article/us-wework-softbank-group/wew...
There are lots of places on the internet to vent rage. There are not as many to gratify intellectual curiosity. These two things are incompatible. Here we want intellectual curiosity. If you wouldn't mind reviewing https://news.ycombinator.com/newsguidelines.html and taking that spirit to heart, we'd appreciate it.
Let's not reward charlatans. Here's how we used to treat them:
https://en.wikipedia.org/wiki/Jeffrey_Skilling#Legal_proceed...
LOL, that's they type of "consulting fee" I need
It's their playbook. Although they left the dotcom crash losing 99% of their value, they walked out with a stake in Alibaba now worth over $100B.
He created a very valuable company, worth billions of dollars. It makes sense that he should capture some large fraction of that wealth.
Yes, some people will lose their jobs. But it's worth noting that those jobs wouldn't have existed in the first place if he hadn't started the company.
His mismanagement has cost him and Softbank billions, which is appropriate as well.
I say this completely aware of what a shitshow WeWork is.
edit: For context this was a response to https://news.ycombinator.com/item?id=21325431 but the mods detached it for... some reason?
he created something that may very well lose its investors billions of dollars without ever turning a dime of profit. What the company is evaluated as on paper by people increasingly disconnected from reality isn't really meaningful.
I'm not really sure what the market function or social function is of rewarding people with billions of dollars who create money-losing machines. If anything it's an indication that some part of the system is increasingly broken.
Softbank and the Saudis wanted to roll the dice on some overpriced unicorns. They went into the deal with eyes open. And it looks like they're taking a massive haircut. Play stupid games...
I do feel sorry for some WeWork employees that will lose their jobs. But, again, many of them joined hoping to get some upside when the company went public -- which was a gamble that didn't pan out. Thankfully it's a good time to be on the job market.
I agree I don’t weep for Soft Bank or the Saudis, but plenty of people took jobs not just on the promise of IPO riches. And laying off a company of WeWork and its subsidiaries size is more than just a handful of people entering the job market — a market that isn’t as good in every city, which is something to consider since We has quite a distributed workforce.
Edited: it is 15,000 people — not 12. And most of them will end up losing their jobs. That’s a lot of people.
Landlords who have choices about working with startups or not. Generally, industry partners on the fence about investing time in startups and choosing their business partners.
Competitors damaged by Son's misinvestment giving WeWork billions to light on fire.
Investors who didn't want to have to demand information rights and crawl though financials looking for rampant self dealing.
Founders like me who resent fraudsters taking the shine off our industry.
I'm sure many joined just because they wanted a job. We can't blame some random executive assistant for not knowing the ins and outs of the company's financial situation or the risk that they were taking. Their layoff will hurt.
Too fcking bad... You do realize that this thing almost went public and as such the lost would have shifted to the shareholders who would have bought the stock while the original investors cashed out. You think those people would have had a conscience at that point. I think not. Fck all the original investors who most likely knew this company was a joke and fraud from the beginning but were hoping the IPO happened so they could walk away with more money.
I'm not shedding a tear if Softbank throws their money away.
Those people could’ve had better career paths without having to bail from WeWork. Other jobs did exist due to record unemployment numbers.
That is why it is terrible. It’s a waste of an opportunity given to a guy who is a human shaped locust.
Unfortunately, in this day and time, sometimes company's value has very little to do with profit or even revenue.
People plan their lives around their projected income, including salary/benefits/equity. With WeWork going down, people aren't just losing their current income, but their future income, and the opportunity cost from working anywhere else instead of WeWork.
The man acted borderline fraudulently to investors, and the market responded once it was in the open. He was running a pump and dump scheme while skimming off the top, and now they're paying him 1.7 billion in severance while people are being laid off with worthless options, lost salary, and a black mark on their resume.
As a startup founder, shit like this poisons the environment both for investment and for hiring employees. When people make choices about where to work, stuff like Theranos and WeWork is distinctly not helpful. It gives our industry a patina of fraud.
I can't imagine what it feels like to be at a promising startup with options and people are floating a 47-60 billion valuation at you, only to have a bunch of shady business come to light and then have that value evaporate before it was ever realized. Even if you didn't act on it, and pretended it was a lottery ticket - the emotional toll must be excruciating. I really empathize with the boots on the ground at some of these companies, they're working hard just like the rest of us.
