The deal will reportedly result in a $1.7 billion windfall for WeWork’s founder and former CEO Adam Neumann.
Jared Kushner has a WeWork problem. So does Canada’s second-largest pension fund; high-end fashion designer Elie Taharie; dozens of the nation’s largest real estate firms; a private equity firm that recently hired President Trump’s former national security chief John Bolton; and possibly even average investors through real estate and mutual funds that have soured investments tied to WeWork.
High-profile real estate developers and some individual investors could be left with losses from WeWork.
So does Canada’s second-largest pension fund; high-end fashion designer Elie Taharie; dozens of the nation’s largest real estate firms; a private equity firm that recently hired President Trump’s former national security chief John Bolton; and possibly even average investors through real estate and mutual funds that have soured investments tied to WeWork.
The list of those with a stake in WeWork’s fate also shows how completely and quickly the company, which opened it first laptop-friendly office-sharing space in 2010, has in less than a decade infiltrated an industry commercial real estate that is at the bedrock of the rest of the economy.
Last month, real estate mogul Sam Zell told CNBC that he believed WeWork’s size, as well as its tremendous financial losses, have become a major liability for the commercial real estate sector as a whole.
In all, the deal will value WeWork at $8 billion down 83% from the $47 billion it was thought to be worth back in January.
The Softbank deal values WeWork’s stock at $19.19, but the strike price for employee options has been above $20 since early 2016. Worse, former WeWork employees who have already exercised their options at higher prices may now be stuck with lower-priced stock.