This archive report was first published on 22 October 2019.
On October 22, 2019, WeWork, the troubled shared office space company, accepted a lifeline from its largest outside investor, SoftBank, the Japanese technology giant, in a deal that marked a humbling moment for the company.
The deal, which was agreed upon after weeks of uncertainty, saw SoftBank take control of WeWork, valuing the company at just under $8 billion, a significant drop from the $47 billion valuation SoftBank had estimated in January.
SoftBank, which had invested about $10.5 billion in WeWork, will now have to pour billions more into the company, cut costs, and stabilize the business.
The sale came after WeWork scrapped its initial public offering (IPO) last month, citing huge losses and an unusual corporate governance structure that raised concerns among Wall Street investors.
Under the deal, SoftBank will buy roughly $1 billion worth of WeWork shares from co-founder Adam Neumann, who stepped down as chief executive last month, and will give him about $500 million worth of financing to repay a credit line he had taken out from JPMorgan.
Mr. Neumann will also receive a $185 million consulting fee in exchange for backing the SoftBank deal and stepping down from WeWork's board.
