SoftBank pulls plug on $3B WeWork bailout

SoftBank pulled the plug on its $3 billion offer to buy WeWork shares from former CEO Adam Neumann and other shareholders, “because certain conditions to the tender offer were not satisfied.” Yahoo Finance’s Editor-At-Large Brian Sozzi shares the latest developments.

Video Transcript

ADAM SHAPIRO: Big news regarding WeWork and SoftBank. Brian Sozzi was one of the first to report this. Bring us up to speed on what's at stake. It has a dollar sign and a three B after it.

BRIAN SOZZI: Yeah, Adam, good good to see you here. And you're correct, this is a story Yahoo Finance broke late last night. It has since been confirmed via press release by SoftBank this morning. The bottom line is Adam Neumann, the founder of WeWork will not be getting a $1 billion bailout from backer SoftBank. SoftBank has pulled their $3 billion tender offer for Neumann's shares, and also a lot of early investors, most notably Benchmark Capital. A source close to the matter does tell me that SoftBank remains committed to providing working capital for WeWork.

But interesting, if you take a step back to look at this release from SoftBank this morning, Adam, they note that they have confidence in WeWork having enough liquidity until 2024. I don't see a lot of people going to WeWorks right now. So I would view that statement by SoftBank with a lot of skepticism.

ADAM SHAPIRO: Have you heard from Adam Neumann, whether he's-- he stands to lose about a billion dollars from all of this. I missed if he had responded to this.

BRIAN SOZZI: We should note that WeWork declined to comment to Yahoo Finance on this, but not a good look for Adam Neumann. By many respects, he ran the company into the ground, a lot of profligate spending. And one of the conditions to this SoftBank pulling its tender offer, they note a lot of criminal investigations are now starting to pile up on the company. Very important to watch. This saga, by no means, is over.