We Predict a 63% Probability that Wework will go to a PE Firm!

Image credits: WSJ.com.

In our January post entitled ‘Friday Digest: Is the endgame near for SoftBank & Wework?’ - we covered the choices that we predict SoftBank will face this year as it tries to move on from being further exposed to Wework’s risks.

Early signs of deep changes within Wework has begun to emerge, one such media outlet reports:

‘‘Longtime SoftBank executive Ron Fisher, Rhone Capital CEO Steven Langman, and former Goldman Sachs executive Mark Schwartz have all left in the past month, according to a person familiar with the situation. The board members could not be immediately reached for comment, and WeWork did not respond to a request to make them available.

The departures come as the company has installed new advisers and executives to its board in the hope of guiding it to profitability. A person familiar with the situation said the departures were negotiated as part of $9.5 billion rescue package SoftBank’s committed to in October.

Lew Frankfort, former CEO of handbag maker Coach, plans to resign from the board when a proposed tender offer from SoftBank closes in April, the person said.

WeWork’s newly appointed CEO Sandeep Mathrani and SoftBank executive Kirthiga Reddy will take two of the SoftBank seats. This is in addition to board seats taken by chairman Marcelo Claure, a SoftBank executive, and Jeff Sine, a partner of the Raine Group, who both joined as board members in October.’’ - sourced from The Real Deal

What next for Wework and SoftBank?

The signals captured by Kähler VC.X strongly indicate that SoftBank will sell its majority stake and the following two options are very likely:

  1. Real Estate Private Equity (we compute a 63% probability) - with this option, a deep-pocketed real-estate PE fund (e.g. Blackstone Group) buys a majority stake from SoftBank.

  2. Adam Neumann returns (we compute a 37% probability) – with this option, Adam Neumann backed by deep-pocketed investors, buys a majority stake from SoftBank and takes back control. Will Adam Neumman reinvent himself into Adam Neumman 2.0 and as a result Wework 2.0? If so, what will Wework 2.0 become?

If you are an investor and would like to find out how our platform can help you source and analyse investment opportunities, please feel free to reach out to our team.

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