SoftBank no longer plans to proceed with all of its bailout of WeWork, justifying its decision to back out of its $3 billion pledge to buy shares back from investors by citing several regulatory investigations of the troubled shared office–space giant.
According to the Wall Street Journal, WeWork’s shareholders were sent a notice Tuesday stating that SoftBank believes that investigations into WeWork’s business, including probes from the Securities and Exchange Commission and Justice Department, allow SoftBank to walk away from its plan to repurchase shares from investors, including those owned by co-founder and former CEO Adam Neumann.
SoftBank’s reversal is a significant blow to Neumann, who had the right to sell nearly $1 billion in stock as part of an October deal that pushed him out of the company.
SoftBank’s plans to pull the plug on the buyback deal will not affect the commitment it made to give $5 billion to WeWork directly, according to the Journal. [WSJ] — TRD Staff