Breaking: WeWork Nets $200 Million for China Business
WeWork sells its China business for a fraction of its former value—and it's lucky to get that.
The We Company (WeWork) (WE US) is lucky to get $200 million for its China business, in my view, even though it had been valued at $5 billion back in 2018.
Good old 2018, back when Softbank Group (9984 JP) & WeWork's complicit banks JPMorgan Chase & Co (JPM US), Goldman Sachs Group (GS US), and Morgan Stanley (MS US) were pitching WeWork to investors as worth $46-104 billion
...versus my $5-7 billion estimate as going concern (see my report "Gravity Works As WeWork Doesn't; Now Plan B" on 9/17/19)
...which it soon wasn't after it's IPO collapsed as I projected (in "The Tide Is Out and WeWork Bondholders Are Naked" on 10/7/19).
Leaving WeWork bondholders stuck in the illiquid dark as I had warned when even Softbank finally had to abandon it to sink or swim on its own as I projected (in "WeWork Bonds in Peril As Softbank Abandons Equity Tender" on 4/1/20)
...and no longer even mentioned by Softbank as it continues to burn through hundreds of millions of dollars every quarteron falling revenue and floundering with likely still more than $40 billion in long term leases it can't afford (see my WeWho? section in "Softbank's Son "Feeling The Force" With Options Funded With Cash It Had Pledged To Protect" on 9/8/20).
...while still drastically overstating available cash by claiming cash commitments from Softbank expected but still not collected plus cash it doesn't own and can't spend on parent operations & debt like customer cash deposits for leasehold improvements WeWork is still obligated to perform and cash owned by its subsidiaries—like in China.
Good times.
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