BEIJING, March 18 (UPI) — SoftBank has previously pledged $3 billion to co-op WeWork, with the deal to close in two weeks, but now it has told shareholders it may withdraw its investment, Bloomberg reported. SoftBank sent a message to shareholders that the U.S. government has frequently launched investigations into WeWork, including U.S. attorneys, the SEC and the Attorney General of California, New York and the Manhattan District Attorney.
Last year WeWork sought to go public but failed, and after the financial crisis, SoftBank bailed out. SoftBank has injected $1.5 billion into WeWork in October and is ready to help it pay off its huge debts.
SoftBank will buy WeWork shares, which is a good thing for former WeWork and current employees, who can cash in; Adam Neumann, the former chief executive of WeWork, will also sell $970m of shares in the deal.
SoftBank executives have long planned to revise their share-buying agreements, and at least in November. They discussed options, such as cutting the number of share purchases, in part to limit Neumann’s ability to reap huge returns.
According to the latest news, SoftBank may drive down prices, may wait until the economy stabilizes before investing, and may even abandon trading altogether. SoftBank’s shares have fallen 27% this month, and both Goldman Sachs and Morgan Stanley have said the global economy is heading into recession. (Star Sea)