WeWork, Once Valued At $47B, Is Now Worth Less Than $3B, SoftBank Says

WeWork New York Headquarters
Courtesy of WeWork
Wework's New York Headquarters

WeWork’s value has fallen to less than $3B, a SoftBank Group earnings report released last week revealed, a piece of a record $13B yearly loss.

The coworking giant's valuation has fallen to $2.7B, Bloomberg reported, down from roughly $8B when SoftBank ousted CEO and co-founder Adam Neumann and from $47B early last year.

SoftBank revealed its $100B Vision Fund venture capital project lost a total of $17.7B in 2019 after the combined value of its investments WeWork and Uber decreased dramatically, the company said in a statement Monday. The company began to market $20B of its shares in T-Mobile on Monday, The Wall Street Journal reported.

At less than 10% of its peak value, WeWork still has tens of billions of dollars in lease obligations that it has on its books not yet fulfilled. Though the company has begun negotiating rent relief with its landlords, WeWork's outstanding liabilities are far higher than its current worth.

The pandemic has only put more financial strain on the company. WeWork missed some rent payments in April, paid 80% of its rent in May and hired major debt brokerages to help renegotiate its leases.

Meanwhile, the company took a hard line in ensuring its own rent collection, requiring customers to pay rent even in cities and states with stay-at-home orders in place despite the fact that they were legally barred from entering the office.

SoftBank CEO Masayoshi Son said the company anticipates 11 Vision Fund companies will file for bankruptcy. Son said he doesn't believe WeWork will be one of them, Axios reported.

Vision Fund investors, dismayed by the financial woes, said they will not support a Vision Fund 2. While Son said he planned to pour SoftBank money into the fund, shareholders pushed him in February to instead put the money towards stock buybacks, Reuters reported.

In his statement, Son acknowledged that SoftBank had stopped marketing the fund.

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