After #WeWork, #Oyo: #SoftBank’s #Startups' Bookkeeping is a Fairy Tale- Appropriately for Unicorns...

"If you screwed up that valuation so badly, what about all of the other companies in your portfolio?"

"That kind of fundraising apparatus is essentially unicorn porn."

Oyo is the other softbank company that is a scam.  

Its a cheap hotel operator in India that has gotten plenty of landlords into debt, in return for pie in the sky dreams from the company. They bought the hooters hotel in Las Vegas!! SEE https://www.nytimes.com/2019/11/12/technology/softbank-startups.html    In the latest round of financing, look at this fast one pulled by Masa Son

Even as SoftBank ran into trouble with WeWork, it helped push up the valuation of Oyo with an unusual funding round. In October, the Japanese company and Agarwal together chipped in, raising the valuation to $10 billion. SoftBank touted the startup as a bright spot when it took the writedown for WeWork, booking a valuation gain of 590 billion yen on 25 investments, of which Oyo was the only one named.

Yet it turned out that Agarwal, now 26, had borrowed $2 billion to finance his share of the purchase from financial institutions, including Japan's Mizuho Financial Group Inc., people familiar with the matter have said. Son himself personally guaranteed the loans to Agarwal, according to another person familiar with the matter. 

In addition, two earlier investors in Oyo were Didi and Grab, the ride-hailing companies backed by SoftBank. That raises the question of whether money used to boost their valuations was then reused to hike the value of another SoftBank investment.-

AKA: A PONZI!!

After WeWork, SoftBank's Startup Bookkeeping Draws Scrutiny

by Peter Elstrom and Pavel Alpeyev

In some cases, SoftBank's involvement in multiple funding rounds helped drive up startup valuations that resulted in paper profits for Son's company.

https://www.bloomberg.com/news/features/2019-11-26/after-wework-softbank-s-startup-bookkeeping-draws-scrutiny

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#SoftBank's plans for second mega #VisionFund hit by #WeWork, #Uber debacles

SoftBank's cash flow problems compound plans for second mega-fund hit by WeWork, Uber debacles

(Reuters) - SoftBank Group founder and CEO Masayoshi Son is struggling to raise money for a second massive technology investment fund in the wake of the failed public offering of office-rental company WeWork and sliding valuations of other major investments, according to two people familiar with the situation.

Son is still determined to go ahead with Vision Fund 2 even though some lieutenants have urged a delay... 

The worsening turmoil at WeWork will continue to be a strain on SoftBank and the first [Vision] fund. 

The price of WeWork bonds has sunk...without further investment from Son or his entities, it will be difficult to stabilize given the size of its future financial commitments.

That is just one of the calls on SoftBank's money. Some of the investors in the first Vision Fund receive interest payments of 7% annually on their stakes, an unusual structure that creates an ongoing need for cash. Some of that has come from sale of stakes...but SoftBank has also borrowed money to fund payouts to investors.

SoftBank also faces the risk that a deal to merge its money-losing U.S. telecom carrier Sprint Corp with T-Mobile US Inc could be blocked by an antitrust lawsuit from U.S. states. If that happens, it will leave SoftBank with an expensive liability, analysts say.

SoftBank's stock has fallen 13% over the past month and is now trading at its lowest level since January. SoftBank's operating cash flow also turned negative last quarter and it could struggle to raise tens of billions of dollars in cash, a Reuters analysis of its balance sheet shows.

SoftBank does not have significant cash on hand to finance the new fund. As of June 30, it had $27.41 billion of cash and cash equivalents on its balance sheet. However, this and other current assets was more than matched by near-term liabilities.

Read the whole article online here: https://premium.kitco.com/news/2019-10-04/SoftBank-s-plans-for-second-mega-fund-hit-by-WeWork-debacle.html

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#WeWork: At What Point Does #Malfeasance Become #Fraud? Neumann fired? My God, he got on the last helicopter out of Saigon…

Great interview with @ProfessorGalloway in the New Yorker on #WeWork's « triage » 

« This is a distressed asset in free fall that is inarguably worth less than zero. Because all we have here is an entity burning $700 million a quarter. »

« The market is going to have to decide how thin the lines are between vision, bullshit, and fraud. »

« Adam Neumann fired? He was liberated. This guy just played this perfectly. Could you imagine what his life would be like right now? If he was still CEO? Showing up every day to an office where he had sold $750 million and everybody else was trying to figure out how they were going to pay the rent on the new apartment they had moved into because they thought they had $7 million in We stock? »

« Adam Neumann came in, smoked his own supply, and walked out with three-quarters of a billion dollars about the time that people in hazmat suits showed up. …So he and his family will literally have to go into hiding. There will be threats against his life. There's going to be so much anger here.»

What about « JPMorgan and Goldman Sachs? These guys were about to collect $130 million in fees and then prop up some equity analysts to tell their private-wealth managers in the marketplace that this thing was $40 billion to $60 billion. And according to Goldman, it was worth $60 billion to $90 billion! What does that say about them? »

« What happens to the New York and Chicago commercial-real-estate markets where WeWork was the biggest and the second-biggest tenants? »

« The real toll is that there's somewhere between 5,000 and 15,000 WeWork employees who took a job and a big part of their compensation — the reason they took these jobs was because of equity value. And it's impossible not to count your money 30 days out from an IPO…

« We're probably talking about several thousand people who were going to be millionaires. Now most of them are probably thinking that in the next 30 days there's a one-in-two chance I don't have health insurance. »

« Adam Neumann fired? My God, he got on the last helicopter out of Saigon. »

Read the whole article in the New Yorker Magazine: 

'At What Point Does Malfeasance Become Fraud?': NYU Biz-School Professor Scott Galloway on WeWork

James D. WalshOct. 1, 2019

http://nymag.com/intelligencer/amp/2019/10/marketing-expert-scott-galloway-on-wework-and-adam-neumann.html?__twitter_impression=true

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#PropTech #Startup #Cadre Flipping #RealEstate Like A Pro Hits $100M in Investor Returns

Cadre was most recently valued at $800 Million. 

In the five years since launching in 2014, the startup now has roughly 20,000 investors who have stakes in more than $3 billion worth of real estate assets.

With the recent sale of two apartment complexes in the Chicago and Atlanta metro areas, respectively, Cadre says it's hit a new milestone—$100 million in returns to its investors, to date.

VC Backers includes Andreessen Horowitz, General Catalyst, Khosla Ventures and Founders Fund. The company is among a wave of "proptech" companies that have sought to disrupt the commercial real estate industry via tech-enabled platforms and products.

Read the article on Fortune here: https://fortune.com/2019/09/26/proptech-startup-cadre-investor-returns/

#Neumann’s Party’s Over at #WeWork

Out as CEO. Just in time ....

WeWTF, Part Deux 

No Mercy / No Malice

Scott Galloway

@profgalloway

"it's as if the lights have been turned on at a cocaine-fueled party that ended several hours too late. Everyone and everything suddenly looks bad, scary even."

…

What's worse than spending all day every day at home with two baby boys or downtown at AMEX? Engaging in fraud.  

The two most senior corporate communications exes, Jennifer Skyler and Dominic McMullan, both left recently, right before the IPO. Ok, so think about that. You are the belles of the ball of a firm about to IPO at $50 billion, and (in the case of Dominic) you announce, weeks before the IPO, "I've decided to take time off to spend with family in Brooklyn for now." Yep, that makes sense. You know us men, always leaving right before the IPO to spend more time with our families. 

The head of comms, Jennifer Skyler, left a few weeks ago for AMEX. ....Who wouldn't want to bolt from the second-most-anticipated IPO of the year to go flack about the new American Express Marriott Bonvoy Brilliant Card???

…

Predictions:

• In the next 30 days, a series of explosive investigative journalism pieces will document breathtaking malfeasance at We.
• In the next 60 days, a state attorney general, SEC, or other regulatory body will launch a formal investigations into We.
• Over the next 12 months, SoftBank's Vision Fund will be shuttered.

See The Whole piece here: 

WeWTF, Part Deux | No Mercy / No Malice https://www.profgalloway.com/wewtf-part-deux/

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