WeWork - Anleihe (Seite 2)

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Antwort auf Beitrag Nr.: 63.126.850 von faultcode am 25.03.20 13:13:26

Das Ende kommt näher:

8.3.
WeWork Skips Paying Some April Rent, Seeks Landlord Relief
https://www.bloomberg.com/news/articles/2020-04-08/wework-is…
• Co-working giant is seeking to reduce its liabilities
• Company ‘believes in the long-term prospects of our locations’
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“Rather than implementing a companywide policy on rent payments, we are individually reaching out to our more than 600 global landlord partners to work in good faith towards finding asset-specific solutions that benefit all parties involved.”

The New York-based co-working giant is in discussions with its biggest landlords globally as it aims to slash as much as 30% from its copious load of rent liabilities, which stood at $47 billion as of June 30, people with knowledge of the talks said last week.
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Company executives have been pitching solutions including revenue-sharing agreements. Such deals would give landlords the chance to collect a portion of future revenue generated by each property. Early indications are that landlords are reluctant, people with knowledge of the matter said last week.
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Einfaches Einfügen von wallstreetONLINE Charts: So funktionierts.

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Antwort auf Beitrag Nr.: 63.071.410 von faultcode am 19.03.20 23:12:32

25.3.
SoftBank attacks Moody’s after debt downgrade
Rating agency’s decision to move technology group down two notches draws angry response

https://www.ft.com/content/5b5048ae-d00d-4b97-ad98-e63c0f444…

SoftBank has demanded that Moody's remove all of its bond and currency ratings on the Japanese conglomerate, after the rating agency issued a two-notch downgrade that cut its debt deeper into junk status.

The group led by Masayoshi Son immediately accused Moody’s of making its decision based on “biased and mistaken views”.

The unusual demand came just two days after SoftBank said it planned to sell $41bn in assets to pay down its heavy debt load and fund a share buyback. Those actions have triggered a 55 per cent jump in SoftBank shares, which touched a four-year low last week as investors panicked over its hefty debt exposure.

“[SoftBank Group] believes that Moody’s ratings action is based on excessively pessimistic assumptions regarding the market environment and misunderstanding that SBG will quickly liquidate assets without any thorough consideration,” the company said.

The downgrades may increase borrowing costs for the group, which is already saddled with $55bn in net debt, with yields on SoftBank’s perpetual bonds, which have no maturity date, climbing above 11 per cent amid a sell off in Wednesday morning trading.

Moody’s cited SoftBank’s “aggressive financial policy” for its decision to cut its rating from Ba1 to Ba3, saying the value of the group’s portfolio would be reduced if it sold off its lucrative stakes in Chinese ecommerce group Alibaba and Sprint during the market volatility caused by the coronavirus pandemic.

“Asset sales will be challenging in the current financial market downturn, with valuations falling and a flight to safety,” said Motoki Yanase, Moody’s senior credit officer, in a statement on Wednesday.

This month, S&P cut its outlook on SoftBank to negative after it also raised concerns about the group’s earlier plan to carry out a $4.8bn share buyback.

While this hefty debt load relative to the group’s cash flows mean that western rating agencies class it as junk, SoftBank has an investment-grade rating from the local Japanese rating agency, JCR.

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Antwort auf Beitrag Nr.: 62.117.846 von faultcode am 09.12.19 22:57:07

Einfaches Einfügen von wallstreetONLINE Charts: So funktionierts.

[faultcode]

9.12.
Goldman Bails-Out Softbank With $1.75 Billion Loan To Bail-Out WeWork
https://www.zerohedge.com/markets/goldman-bails-out-softbank…

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Finally, as one veteran investor mocked - this all looks like one giant self-reacharound for Goldman to rescue their own investment in WeWork from further writedowns.

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“That kind of fundraising apparatus is essentially unicorn porn.”

26.11.
After WeWork, SoftBank’s Startup Bookkeeping Draws Scrutiny
https://au.finance.yahoo.com/news/wework-softbank-startup-bo…

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In early 2018, the founders of Chinese artificial intelligence startup SenseTime Group Ltd. flew to Tokyo to see billionaire investor Masayoshi Son. As they entered the offices, Chief Executive Officer Xu Li was hoping to persuade the head of SoftBank Group to invest $200 million in his three-year-old startup.

A third of the way into the presentation, Son interrupted to say he wanted to put in $1 billion. A few minutes later, Son suggested $2 billion. Turning to the roomful of SoftBank managers, Son said this was the kind of AI company he’d been looking for. “Why are you only telling me about them now?” he asked, according to one person in the room.

In the end, SoftBank invested $1.2 billion, helping to transform SenseTime into the world’s most valuable AI startup. The young company’s valuation hit $7.5 billion this year.

That investment model is now under fire after Son, 62, boosted the equity in office-sharing startup WeWork only to see it plummet as investors balked at enormous losses and troublesome governance. Indeed, SoftBank has participated, along with other investors, in scores of fundraisings that have added a total of more than $150 billion to the value of private companies, according to Bloomberg calculations. Among its deals are the world’s top two startups—ByteDance Inc. valued at $75 billion and Didi Chuxing Inc. at about $56 billion. In some cases, SoftBank’s involvement in multiple funding rounds helped drive up valuations that resulted in paper profits for Son’s company.


The WeWork fiasco raises questions about such numbers. The co-working startup’s valuation crested at $47 billion this year with SoftBank’s investment, then plummeted to $7.8 billion in a bailout engineered by Son. WeWork is slashing jobs and scaling back operations.

“WeWork is not just a mistake, it is a signal of weakness in the whole model,” said Aswath Damodaran, a professor of finance at New York University’s Stern School of Business, who has written four books on valuing businesses. “If you screwed up that valuation so badly, what about all of the other companies in your portfolio?”

SoftBank said WeWork is an exception rather than a symptom of broader problems, and it has learned from the experience.

Since unveiling his $100 billion Vision Fund in 2016, Son has become the most active tech investor on the planet, pouring money into more than 80 companies. That helped create a bumper crop of unicorns, more than 300 startups priced at $1 billion or greater, according to the research firm CB Insights.

What’s not as well understood is the incentive Son has to keep valuations rising. When SoftBank buys shares in a startup and then invests again at a higher valuation, Son says he has made a profit. That is legal under accounting standards, but SoftBank receives no money. The only change is that SoftBank has boosted the value of its original stake from, say, $1 billion to $2 billion by raising the value of the startup. In SoftBank’s income statements and return calculations, at least some of the additional $1 billion can be counted as profit.

“My brain and my heart, almost everything about myself is focusing on Vision Fund”

“They pump up valuations to get higher returns to look good to investors,” says Eric Schiffer, chief executive officer of Patriarch Organization, a Los Angeles-based private equity fund. “That kind of fundraising apparatus is essentially unicorn porn.”

SoftBank said its accounting complies with all standards and is consistent with widely accepted practices. As for startup valuations, it said it is not determining them on its own and invests with experienced firms such as Sequoia Capital and Temasek Holdings Pte. “Our valuations have been validated by more than 120 sophisticated investors who’ve invested alongside and after us,” Navneet Govil, chief financial officer of SB Investment Advisers, the entity that manages the Vision Fund, said in a statement.


SoftBank said it has a rigorous internal process for setting valuations, and it books profit on any increase in valuation only after taking into account future cash flows and public market proxies, as well as private market funding prices. SoftBank’s auditors at Deloitte & Touche check those calculations, and the Vision Fund’s limited partners have their own auditors, including staff from Duff & Phelps and Ernst & Young, who vet the final figures. “Our valuation process is robust and reviewed quarterly by independent auditors,” Govil said. “We believe our performance is strong. In just two and a half years, Vision Fund 1 has already had seven IPOs, $4.7 billion of realized gains, $11.4 billion in cumulative investment gains and returned $9.9 billion to our limited partners.”

Today’s accounting rules may be ill-suited to an era of unprecedented speculation on unicorns. Under the International Financial Reporting Standards (IFRS) that SoftBank uses, companies have wide latitude to determine how much they think portfolio companies are worth—and therefore how much profit they report to investors. It’s unclear whether any company has tried to determine paper profits for tech startups on the scale SoftBank is now using. “I don't believe we’ve ever seen an attempt to record this magnitude of income with respect to unquoted equity investments,” said Robert Willens, a tax expert in New York.


Son’s bookkeeping has allowed him to claim his average internal rate of return far outpaces those of other investors. This month, as SoftBank took a hit from WeWork, Son defended his investment approach. “There are 5,000 venture capitals globally and average IRR is 13%,” he said. “Our return is about twice as big as this.”


Son’s confidence in his own acumen led to the creation of the Vision Fund in 2017, which at the time was more than 10 times the size of any venture capital fund. He was seeking to repeat the success of his most celebrated investment—a $20 million bet on China’s Alibaba Group Holding Ltd. that turned into stock now worth more than $120 billion.

With Abu Dhabi’s Mubadala and Saudi Arabia’s Crown Prince Mohammed bin Salman backing the Vision Fund, Son began a blitzkrieg of deals in 2017. He invested more than $35 billion across about 100 companies, according to research firm Preqin. Among the biggest were multi-billion-dollar fundings of WeWork and Didi Chuxing, the Chinese ride-hailing giant modeled after Uber Technologies Inc. In December, a SoftBank-led group invested $9 billion in Uber, including buying stock from existing shareholders.

SoftBank began including financial results for the Vision Fund during the fiscal year that ended in March 2018. Total operating profit including a related Delta Fund was 303 billion yen, or less than $3 billion. That surged to 1.26 trillion yen the following year, making it the most profitable unit at Son’s company and accounting for more than half the parent company’s operating income. With Son’s energy directed at startups, SoftBank spun off the domestic telecom business that had made it famous and generated cash for his early investments.

“My brain and my heart, almost everything about myself is focusing on Vision Fund,” Son told investors in May.


But the profits SoftBank booked were mostly on paper. In the first fiscal year, unrealized gains on investment valuations accounted for essentially all the stated income for the Vision and Delta funds. In the most recent fiscal year, unrealized gains on valuations amounted to 1 trillion yen, while realized gains—like the sale of India e-commerce giant Flipkart to Walmart Inc.—totaled less than 300 billion yen.

WeWork underscores the risks of that approach. SoftBank first took a stake in August 2017 at a valuation of $21 billion. It then invested another $3 billion in November 2018 at a $45 billion valuation and later agreed to a $1.5 billion warrant at $47 billion. As Son reported results this May, he highlighted WeWork as an example of portfolio companies heading for IPOs. When the deal fell apart, SoftBank took a 498 billion yen hit.

SoftBank Vision Fund said it never took profits from WeWork by marking it all the way up to $47 billion. It kept the shares on its books at about half that price. It still had to take that down by about 75%, which led to the loss.

Venture capital and private equity firms are mostly private so they don’t need to report quarterly profits to public shareholders, and their limited partners are typically focused on returns when portfolio companies cash out through IPOs or acquisitions. SoftBank doesn’t reveal specific valuation changes for each of its portfolio companies in a quarter, typically only naming a few winners or losers. Investors putting money in alongside SoftBank are at times affiliates, like Grab, Didi and Alibaba.

“If I’m an investor, I want to know how they are coming up with these numbers. Otherwise, you can’t believe any of the valuations,” said NYU’s Damodaran. “The more they talk about accountants the less I would trust the numbers.”

SoftBank concluded that under IFRS rules the Vision Fund must count valuation changes as income because its primary business is investing, and SoftBank Group must incorporate that income in its books because the Vision Fund is a consolidated subsidiary. One person close to the company said the resulting profit figures are almost meaningless, but there is no better accounting method given the current rules.


“I’m not an accountant or a lawyer, but presenting this as income doesn’t make any sense,” said Ilya Strebulaev, a professor of finance at Stanford University’s Graduate School of Business whose research suggests the latest, post-money valuations typically overvalue startups by about 50%.


Adding to the complexity is that startup stakes are sometimes transferred between SoftBank Group and the Vision Fund, which have different shareholders. The price at which those assets are shifted has implications for profits on either side.


After WeWork, other deals are coming under scrutiny. SoftBank invested in Didi Chuxing in 2015 with the Chinese company’s valuation at about $6 billion. It then put more money in about once a year as Didi’s valuation climbed to $56 billion.

But Didi has run into trouble since the fundraising two years ago. Chinese regulators have cracked down on ride-hailing services for drawing migrant workers into big cities and hurting taxi drivers’ incomes. Two passengers were killed after using its car-pooling service, prompting a government suspension. In addition, investors have grown skeptical about ride-hailing after the roughly 35% slump in Uber’s shares since its May IPO.

Uber’s drop means SoftBank should probably mark down Didi by at least the same margin, said one person who has worked on deals with SoftBank. The Japanese company would also have to look at its investments in other ride-sharing companies such as Grab Holdings Inc. in Southeast Asia, the person said. Didi declined to comment. A Grab spokeswoman said there has been no change in its valuation and it has diversified beyond ride-hailing.

SoftBank took a loss in its most recent earnings report on its Uber stake, but made no mention of the other ride-hailing firms in its portfolio. It did cut the estimated value of its stakes in Didi and other ride-hailing services in the most recent quarter, according to one person close to the company. SoftBank said it can’t disclose the loss or gain on every portfolio company each quarter.

SoftBank said Didi is an example of how it is not responsible for propelling startup valuations because Silicon Valley’s Silver Lake Management invested alongside SoftBank at the same price. Toyota Motor Corp. and Booking Holdings Inc. then bought shares at a higher valuation.

In the U.S., food-delivery firm Doordash Inc. struggled to distinguish itself from rivals and hadn’t hit the $1 billion unicorn mark until SoftBank invested in the company last year. Then in just over a year, Doordash’s valuation went from $1.4 billion to $12.6 billion this May. When SoftBank reported earnings the next quarter, it highlighted Doordash as one of the main contributors to its operating income.


Perhaps SoftBank’s most controversial deal after WeWork is an Indian startup called Oyo that was founded six years ago by teenager Ritesh Agarwal. It aimed to bring reliable quality to the country’s chaotic lodging industry. Oyo staff help hoteliers upgrade everything from furniture to bedding and toiletries and the hotel or guest house gets a bright red Oyo sign as a seal of approval, encouraging travelers to book. Oyo takes a cut of roughly 25%.

While SoftBank backed Oyo from its early days, some people close to the company worry that Son’s relationship with Agarwal is similar to his ties to WeWork co-founder Adam Neumann and that he may be making similar mistakes. The Vision Fund put $250 million into Oyo in 2017 and led a $1 billion funding round last year, which pushed the Indian company’s valuation to $5 billion. Son encouraged Agarwal to expand into markets such as China and the U.S. and to buy properties, including the Hooters Casino in Las Vegas for $135 million.

Stephen Givens, an M&A lawyer in Tokyo, argues that Oyo’s business model resembles WeWork’s, a tech-inflected real estate business that has expanded far beyond its initial concept. “Oyo made sense in a place like India,” he said. “But moving into the U.S. and buying real estate is a big risk.”

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.

“My brain and my heart, almost everything about myself is focusing on Vision Fund”

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. Mizuho declined to comment.

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.

SoftBank did not disclose Son’s personal role in the deal or the bank loans to Agarwal. Ultimately, the Vision Fund decided it wouldn’t mark up its Oyo stock to the $10 billion valuation because the latest funding did not include independent investors.

In a statement, Oyo said it is grateful for the support of investors including the Vision Fund. “We are a well-run company with a healthy balance sheet and a strong focus on business economics, and the same can be seen in the continued momentum we’ve seen in reducing our net losses,” it said. “We have great business relationships with both Didi and Grab since late 2017 and early 2018 when the fundraising had not happened.”

Analysts trying to make sense of SoftBank’s valuations have been frustrated by what they view as a lack of transparency in such cases. SoftBank doesn’t discuss in detail the standards by which it values a particular startup or accounts for such gains as profit on its income statement. “SoftBank has offered little visibility into how they value their investments,” says Jefferies Group senior analyst Atul Goyal.

Masafumi Takeno represented Japan on the IFRS Foundation committee that developed materials explaining how to use valuation guidelines. He said companies have broad discretion to determine asset values and disclosures. “The rules are pretty loose and permissive,” he said.

For years, Son has expressed frustration that investors don’t see the value of his business. In presentations, he will often focus in on how SoftBank’s market capitalization is below the value of its assets, including publicly traded stocks like Alibaba. In February, he opened an event with a slide that showed: “25 – 4 = 9?” The point he was making is that SoftBank held assets worth 25 trillion yen—including a 12.5 billion yen stake in Alibaba—and had only 4 trillion yen in debt. Yet investors bestowed a value of 9 trillion yen on SoftBank, a discount of more than 60%. “It’s just beginner math,” Son said. “This is too cheap.”

The SoftBank discount narrowed after that presentation with the help of a stock buyback and the impending IPOs for companies like Uber. On its website, Son’s company ran daily calculations of assets minus debt to show what the share price should be. But with the WeWork implosion, SoftBank’s market cap has dropped back below 9 trillion yen and the discount has widened again to more than 60%. The stock has dropped 30% since its April peak, though it’s still up 15% for the year. Shares reversed morning gains on Tuesday and dropped almost 1%.

“Markets are telegraphing that the trust is gone,” said NYU’s Damodaran. “Masa needs to rebuild that.”

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diese Generation wird noch die ein oder andere Lektion (vom Markt) erteilt bekommen in den nächsten paar Jahren:




https://twitter.com/ghoshal/status/1199533093788561410

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19.11.
Exclusive: New York State Attorney General investigating WeWork - sources
https://www.reuters.com/article/us-wework-newyork-investigat…

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...The New York State Attorney General (NYAG) is investigating WeWork, according to two people familiar with the matter, adding to a mounting series of problems that have turned the workspace provider from a Wall Street darling to a pariah in a matter of weeks.

The company, which is expected to lay off thousands of employees beginning this week as it faces ballooning losses, confirmed on Monday that it had been contacted by the office of the NYAG, Letitia James.

“We received an inquiry from the office of the New York State Attorney General and are cooperating in the matter,” said a WeWork spokeswoman when contacted by Reuters.

A spokesman for the NYAG declined to comment.

Among the issues the NYAG is examining is whether WeWork’s founder and former chief executive, Adam Neumann, indulged in self-dealing to enrich himself....

[faultcode]

Antwort auf Beitrag Nr.: 61.917.596 von faultcode am 14.11.19 01:07:48

neues Tief bei der Anleihe:



Grund: mögliche SEC-Untersuchung

15.11.
WeWork Bonds Crash To Record Lows As SEC Inquiry Looms
https://www.zerohedge.com/markets/wework-bonds-crash-record-…

...The SEC's enforcement division is allegedly investigating WeWork's disclosures to investors around the time it filed an S1 in August and other filings around its attempted IPO in September...

[faultcode]

Antwort auf Beitrag Nr.: 61.885.976 von faultcode am 10.11.19 19:54:24

13.11.
WeWork's Quarterly Loss Exploded To $1.3 Billion Ahead Of Failed IPO
https://www.zerohedge.com/economics/weworks-quarterly-loss-e…

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The recently insolvent company which until a few months ago had a valuation of $47 billion before it had to be bailed out by SoftBank saw its losses more than double in the third quarter, soaring to $1.25 billion, not much below its loss for the entire 2018. The results, which were reported in a presentation for WeWork creditors - the company has to file financials to the group of creditors who hold its "public" debt - seen by Bloomberg and the Financial Times, revealed why the cash incinerating office sublettor careened towards a cash crunch when its IPO plans and a linked debt financing collapsed in September.

In a furious money-burning attempt to impress investors with its market share, WeWork opened almost 100 offices in the third quarter, bringing its total to 625, and helping lift WeWork’s net revenues in the period by 94% from 4482 million a year earlier to $934 million. That was the good news: the bad news is that WeWork affirmed that it continues to lose more than two dollars for every dollar the group generated in sales in the period.

In its unprecedented spending spree to spend all of its IPO proceeds before it even went public, the company also said it added 115,000 desks in the third quarter, taking its total to 719,000. However, the reason why such hollow growth would end up resulting in an even greater loss is that WeWork reported 609,000 memberships at the end of Q3, meaning its overall occupancy rates slid as it raced to open new locations to 79 per cent at the end of the third quarter from 82 per cent at the end of June...

[faultcode]

Antwort auf Beitrag Nr.: 61.862.799 von faultcode am 07.11.19 14:29:17

10.11.
WeWork Was Wrestling With SEC Over Key Financial Metric Just Before It Scrapped IPO
Regulator raised numerous concerns about a metric WeWork called ‘contribution margin’ as it was trying to court investors, documents show
https://www.wsj.com/articles/wework-was-wrestling-with-sec-o…

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We Co., as the WeWork parent is known, had filed its draft prospectus confidentially with the SEC for review in December 2018, giving the company months to negotiate with the agency behind closed doors about its contents before unveiling it to the public.



But as the IPO loomed, the SEC zeroed in on how WeWork framed its heavy losses, particularly through a bespoke profitability metric called “contribution margin,” a version of which had formerly been known as “community-adjusted Ebitda.” The agency had first ordered WeWork to remove the measure, before the company offered to substantially change it.

In mid-September, the day before WeWork had hoped to start the roadshow to peddle its IPO to investors, the metric was still mentioned in its revised prospectus more than 100 times. The company planned to amend the filing before starting the roadshow, according to a person close to WeWork—but instead shelved the IPO, as investors questioned the company’s worth and its corporate governance.
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WeWork deployed a battalion of Wall Street lawyers to try to win over the regulator, according to people close to the tumultuous process.
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WeWork fought back hard, especially on contribution margin, the correspondence shows. One version of the metric, which previously WeWork had called community-adjusted Ebitda, was widely derided because it excludes costs to such an extent that it flipped WeWork’s bottom line for 2018 from a net loss of about $1.9 billion using standard accounting, to a $467 million profit.

WeWork’s resistance to removing the metric was directed by Mr. Neumann, people familiar with the discussions said. Mr. Neumann had previously boasted about the metric to reporters and investors, to show how the company’s core business was profitable.
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The SEC is stepping up scrutiny of creative financial measures, lawyers said. Nearly all big companies now use at least one non-GAAP financial metric. Last year, 97% of S&P 500 companies used non-GAAP metrics, up from 59% in 1996, according to an analysis for the Journal by research firm Audit Analytics.

It isn’t unusual for companies to go through several rounds of comments with the SEC in the run-up to an IPO. The stock can’t be sold until the agency gives the green light to the prospectus, and SEC officials will nitpick details of the disclosure until they are happy, lawyers say.