|Bid||0.00 x 0|
|Ask||0.00 x 0|
|Day's Range||19.72 - 19.93|
|52 Week Range||15.54 - 28.04|
|Beta (3Y Monthly)||2.06|
|PE Ratio (TTM)||2.78|
|Forward Dividend & Yield||0.10 (0.52%)|
|1y Target Est||N/A|
Oct.16 -- SoftBank Group Corp. is in discussions to provide WeWork with roughly $5 billion in rescue financing, according to a person familiar with the matter. Bloomberg's Liana Baker has more on "Bloomberg Markets: The Close."
Recent reports indicate that WeWork could lay off 2,000 workers as soon as this week. WeWork staff believers that this may only be the beginning of the cuts and that even more of the company’s workforce could face unemployment. Yahoo Finance’s Myles Udland, Brian Sozzi and Dan Roberts discuss on The Final Round.
Oct.14 -- WeWork is said to prefer JPMorgan’s financing package as opposed to a rescue by SoftBank. Bloomberg’s Davide Scigliuzzo reports on “Bloomberg Markets: China Open.”
SoftBank Group Corp <9984.T> is attempting to become the majority owner of WeWork without assuming the onerous lease obligations of the U.S. office-space sharing firm, according to people familiar with the matter. SoftBank is offering a $5 billion financing lifeline that The We Company, the parent of New York-based WeWork, is assessing against a proposal by JPMorgan Chase & Co for a debt package of similar size from banks and institutional investors. WeWork could run out of cash as early as next month without new financing, sources have said, after the company pulled plans in September for an initial public offering (IPO).
(Bloomberg) -- SoftBank Group Corp. is assembling a rescue financing plan for WeWork that may value the office-sharing company below $8 billion, according to people familiar with the discussions.The new figure is a fraction of the $47 billion valuation the startup commanded as recently as January. The talks are fluid and the terms could change, said the people, who requested anonymity because the discussions are private.WeWork, reeling since it scrapped its initial public offering, has been considering dueling plans from SoftBank and JPMorgan Chase & Co. to shore up its finances before it runs out of cash as early as next month. The company’s board could make a decision as soon as this weekend, according to some of the people familiar with the situation.Representatives for WeWork and SoftBank declined to comment.JPMorgan has been pitching investors on a $5 billion junk-debt package for WeWork. The unsecured and secured notes portion of the bank’s plan are being offered on a “best-efforts” basis, according to people familiar with the matter, meaning banks haven’t committed to funding the deal irrespective of investor demand.The bank has been sharing its proposal with about 100 investors as it tries to line up support for what would be one of the riskiest debt offerings in recent years, people with knowledge of the matter said earlier this week.Uncertainty around WeWork’s future has whipsawed its bonds in recent weeks. The debt plunged to record lows on Tuesday as the company weighed a financing package that included debt that could yield 15%, only to erase those losses a day later amid reports that SoftBank was considering a new investment. The debt currently trades at around 85 cents on the dollar, and hasn’t been near par since before the company pulled its IPO last month.SoftBank, which with its affiliates already owns a little under one-third of WeWork, has been in discussions to provide the company with $5 billion of funding in a mix of equity and debt. The financing would come directly from the Japanese firm, rather than its Vision Fund, a person said earlier this week. SoftBank would not amass a majority of voting rights, though its stake would increase, the person said. Part of the package may include non-voting preferred stock.Part of the appeal of the SoftBank plan is the office-sharing company’s longstanding relationship with the investment behemoth, one of the people said. At the same time it would further dilute existing shareholders and employees -- a consideration in favor of the JPMorgan proposal.(Updates with bond prices in seventh paragraph.)\--With assistance from Claire Boston.To contact the reporters on this story: Gillian Tan in New York at email@example.com;Sonali Basak in New York at firstname.lastname@example.org;Michelle F. Davis in New York at email@example.com;Saritha Rai in Bangalore at firstname.lastname@example.orgTo contact the editors responsible for this story: Craig Giammona at email@example.com, Alan GoldsteinFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
for WeWork that might force the US bank to impose margin calls on co-founder Adam Neumann. The Japanese tech group and the US bank have submitted competing plans to pump as much as $5bn into WeWork in a debt-and-equity deal that could value the group’s equity at $8bn or less, according to multiple people briefed on the matter. The proposal from SoftBank, which has already sunk more than $10bn into the company, would significantly dilute other equity holders, including Mr Neumann.
Abu Dhabi state investor Mubadala Investment Co is weighing debt issuance amid attractive market conditions and could invest in oil giant Saudi Aramco's planned share offering, its group chief executive said on Thursday. Khaldoon Khalifa al Mubarak added the state investor exited its investment in U.S.chipmaker Advanced Micro Devices in September after 12 years, having made $4.25 billion on its initial investment of $770 million. The Gulf has seen a flurry of international debt issuance as governments and companies take advantage of low global rates to attract yield-seeking investors and raise debt cheaply.
WeWork owner, The We Company, has formed a special board committee to consider proposals for a $5 billion financing lifeline from its largest shareholder SoftBank Group Corp <9984.T> and its main lender JPMorgan Chase & Co , four people familiar with the matter said on Wednesday. The office-space sharing company is establishing the committee in an effort to ring-fence its financing deliberations from SoftBank's influence, the sources said. Sources have said it could run out of cash as early as November unless it secures new financing.
The company is discussing a $5 billion financing rescue from its largest shareholder Softbank Group Corp (OTC: SFTBY), and its principal lender JPMorgan Chase & Co. (NYSE: JPM). The committee, consisting of two members of The We Company board of directors, will represent the interests of all the company’s shareholders in its quest to urgently raise funds. Per Reuter’s sources, one of the members is Bruce Dunlevie, a general partner at WeWork shareholder Benchmark Capital.
WeWork owner, The We Company, has formed a special board committee to consider proposals for a $5 billion financing lifeline from its largest shareholder SoftBank Group Corp and its main lender JPMorgan Chase & Co , four people familiar with the matter said on Wednesday. The office-space sharing company is establishing the committee in an effort to ring-fence its financing deliberations from SoftBank's influence, the sources said. Sources have said it could run out of cash as early as November unless it secures new financing.
(Bloomberg) -- SoftBank Group Corp. is in discussions to provide WeWork with roughly $5 billion of rescue financing in an effort to salvage one of the Japanese conglomerate’s biggest investments.The funds will come directly from SoftBank, rather than its Vision Fund, according to a person familiar with the matter who asked not to be named because the talks are private. SoftBank, which already owns about one-third of WeWork, would not amass a majority of voting rights, though its stake would increase, the person said. Part of the package may include non-voting preferred stock.News of the financing talks sent WeWork’s bonds to their biggest gain on record Wednesday. The jump of more than 8 cents on the dollar erased a record plunge a day earlier.WeWork, reeling in the past few weeks since parent We Co. scrapped its initial public offering, and in danger of running out of cash as early as next month, has been pursuing a pair of rescue plans to shore up its finances -- one from SoftBank, its largest shareholder, and another from JPMorgan Chase & Co. that would include a $5 billion debt package.New York-based WeWork had been headed toward one of the year’s most hotly anticipated IPOs last month before prospective investors balked at certain financial metrics and flawed governance, turning the company into a cautionary tale of private market exuberance and costing the top executive his job. The fast-growing, money-losing startup had been counting on a stock listing -- and a $6 billion loan contingent on a successful IPO -- to meet its cash needs.Billionaire Masayoshi Son, who controls investment powerhouse SoftBank, was instrumental in ousting WeWork’s controversial co-founder Adam Neumann, but is convinced the once high-flying startup can be turned around, a person familiar with the company’s thinking said recently. SoftBank has already plowed more than $10 billion into WeWork and holds one seat on the company’s seven-member board. It has been in advanced talks to acquire more shares at a significantly lower valuation than the $47 billion WeWork sported in January, two people familiar with those discussions said last week. The Japanese company had agreed to contribute at least another $1.5 billion to WeWork next April, according to the startup’s now-withdrawn prospectus for its IPO.JPMorgan’s package, which has been the company’s preferred option, would be one of the riskiest junk-debt offerings in recent years. The plan has been been met with skepticism from investors, who are concerned about the company’s ability to service the debt.Representatives for WeWork and SoftBank declined to comment on SoftBank’s proposal. Japan’s Nikkei reported details earlier Wednesday.Son is facing a reckoning after repositioning SoftBank from a telecom operator into an investment conglomerate with stakes in scores of startups around the world. The success or failure of WeWork will likely to be read as a statement on the overall standing of SoftBank, the judgment of its executives and its ability to raise cash for future ventures. But Son has made clear, in a recent interview with Nikkei Business magazine, how unhappy he is with how far short his accomplishments have fallen of his goals. SoftBank also put almost $8 billion into Uber Technologies Inc., whose shares have declined about 30% since its IPO earlier this year. Still, Son said he is convinced that WeWork and Uber will be substantially profitable in 10 years.But first, SoftBank is looking at potential damage in the billions of dollars. Analysts at Sanford C. Bernstein & Co. estimate that the Vision Fund, SoftBank’s main investment vehicle, will have to write down $5.93 billion, with another $1.24 billion drop for the part of WeWork owned by SoftBank Group.(Updates with background on SoftBank from sixth paragraph.)\--With assistance from Katherine Doherty and Sarah McBride.To contact the reporter on this story: Gillian Tan in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Craig Giammona at email@example.com, Michael J. Moore, Molly SchuetzFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
India’s largest mobile payments group Paytm is seeking to raise $2bn from investors including Ant Financial and SoftBank to better compete with rivals Amazon and Walmart, according to two people close to the company. The fundraise is expected to close “within two months” and will take Paytm’s valuation to $15bn, said one person. “The next phase of Paytm’s journey is to expand its offerings in consumer internet and financial services,” he added.
(Bloomberg) -- Bankers who two months ago were fighting for a piece of WeWork’s highly anticipated share sale are now scrambling to just keep the company alive.WeWork and its backers are furiously trying to line up two rescue plans before it runs out of cash as early as next month: one by SoftBank Group, the company’s largest shareholder, and another by JPMorgan Chase & Co., which won WeWork’s IPO mandate but ultimately didn’t pocket a fee as the plan collapsed and cut off WeWork’s access to new cash.JPMorgan is sharing its proposal -- an unusually risky $5 billion debt package that is WeWork’s preferred option -- with about 100 investors, according to a person with knowledge of the discussion. Several have expressed skepticism about WeWork’s ability to service the debt, and news of the proposal’s eye-popping terms sent the company’s existing bonds reeling to a new low on Tuesday.At the same time, SoftBank is trying to pull together a backup option. The Japanese investment powerhouse would inject capital into WeWork and take a controlling stake, a move the company’s management hopes to avoid. To help it craft a proposal, SoftBank hired advisers at Houlihan Lokey to explore options for easing WeWork’s cash crunch, said people with knowledge of the discussions.Both proposals share one thing: a lot of uncertainty.“WeWork’s credit metrics remain off-the-chart ugly,” Vicki Bryan, chief executive officer of Bond Angle, a high-yield credit research company, said in a note Tuesday.JPMorgan’s plan would raise $5 billion in one of the riskiest junk-debt offerings in recent years that could include $2 billion of pay-in-kind bonds yielding 15%. The bank is casting an unusually wide net for this type of offering, pitching investors ranging from some of the world’s largest asset managers to credit hedge funds with expertise in distressed investing, according to people familiar with the matter.PIK NotesPayment-in-kind notes, known as PIKs in industry parlance, give issuers the option to pay interest on debt with more debt. In buying PIK deals, investors are effectively betting that a cash-strapped company will be able to make good on a ballooning debt obligation when it matures. PIK debt has historically been favored by the likes of struggling energy companies and firms exiting bankruptcy.While terms remain under discussion, the potential WeWork PIK could pay 5% interest in cash and 10% interest in debt that would accumulate and become due at maturity. That means that a $2 billion obligation with a 10% payment-in-kind option would grow to $2.7 billion after three years and $3.2 billion after five.WeWork’s board has hired the investment bank Perella Weinberg Partners LP as it weighs its options. With funds running low, the company expects to cut potentially thousands of jobs from its staff of about 12,500 this month, as it focuses on its core business of renting out office space.Lending to WeWork is so potentially dicey that one junk-bond investor, Diamond Hill Capital Management’s John McClain, said anybody brave enough to do it would “be taking on substantial career risk.”The proposed yield in the new debt package underscores skepticism among debt investors that the company will be able to stem its cash bleed and become profitable anytime soon. It’s a costly option that may reward investors handsomely in the event of an actual turnaround.Skeptical ReactionThe market’s initial reaction wasn’t encouraging. WeWork’s existing notes, $669 million of 7.875% bonds due in 2025, fell the most on record Tuesday morning after Bloomberg reported on the potential terms for a new debt package. The junk bonds dropped to a record low of 79 cents on the dollar to yield 13.4%, according to Trace, before recovering a bit.SoftBank’s advisers at Houlihan are working on cutting liabilities as WeWork mulls the debt package. Other measures for restructuring WeWork’s balance sheet could include renegotiating or terminating some existing leases to reduce WeWork’s indebtedness and cash burn. Future lease payment obligations as of June 30 were $47.2 billion, according to the prospectus for WeWork’s aborted IPO.The new debt could come with a coupon nearly twice that of the junk bonds the company sold less than 18 months ago.“If they are talking about doing a PIK note at a yield of 15%, the existing unsecureds have to reprice,” McClain said.\--With assistance from Katherine Doherty and Michelle F. Davis.To contact the reporters on this story: Claire Boston in New York at firstname.lastname@example.org;Gillian Tan in New York at email@example.com;Liana Baker in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Craig Giammona at email@example.com, Rob UrbanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- SoftBank Group Corp. has tapped investment bankers at Houlihan Lokey to explore options for easing WeWork’s cash crunch, according to people with knowledge of the discussions.Houlihan is working on cutting liabilities as WeWork mulls a separate deal that could hand control of the struggling office-sharing company to SoftBank, its biggest shareholder, according to the people. They asked not to be named as the discussions are private.Other measures for restructuring WeWork’s balance sheet could include renegotiating or terminating some existing leases to reduce WeWork’s indebtedness and cash burn, the people said. Bankers are also reviewing WeWork’s financial reporting, accounting practices and projected building valuations, one of the people said.Future lease payment obligations as of June 30 were $47.2 billion, according to the prospectus for WeWork’s aborted initial public offering.WeWork prefers a plan led by JPMorgan Chase & Co. to arrange a $5 billion financing package to a SoftBank-led rescue package, Bloomberg has reported. The board of WeWork’s parent, We Co., is working with investment bank Perella Weinberg Partners LP, Bloomberg reported. Both Perella and Houlihan have extensive practices focused on restructuring debts for troubled companies.Representatives for Tokyo-based SoftBank and Houlihan Lokey declined to comment.WeWork is seeking to shore up its finances after pulling its IPO last month.(Adds additional details in third paragraph.)\--With assistance from Eliza Ronalds-Hannon.To contact the reporters on this story: Gillian Tan in New York at firstname.lastname@example.org;Liana Baker in New York at email@example.com;Nabila Ahmed in New York at firstname.lastname@example.orgTo contact the editor responsible for this story: Rick Green at email@example.comFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- WeWork’s calamitous effort to take itself public has raised red flags for other SoftBank-backed real estate startups -- and led an executive at the brokerage Compass to send its employees an eight-point memo highlighting differences between the two firms.Compass, like WeWork, has relied heavily on funding from SoftBank Group Corp.’s Vision Fund. The brokerage has become a major player in high-end markets like Manhattan and San Francisco, though some real estate experts say it is more like a traditional brokerage than a tech-industry disrupter.Unlike WeWork, Compass has no debt and is valued at a revenue multiple comparable to publicly traded real estate technology companies, according Chief Financial Officer Kristen Ankerbrandt.“Over the past few weeks we have seen comparisons being drawn between Compass and WeWork simply because we share a single investor,” Ankerbrandt wrote to employees last week in an email obtained by Bloomberg. “To be clear, our businesses are quite different -- in terms of our business model, capital structure, customers, culture and investments.”Ankerbrandt also boasted of Compass’s deep roster of investors, including Qatar Investment Authority and Dragoneer Investment Group; a 425-member tech team building tools to differentiate Compass from other brokerages; and a frugal leadership team that “books coach tickets and does not fly on private jets.”In December 2017, the Vision Fund agreed to invest $450 million in Compass, touted at the time as the largest real estate technology investment in U.S. history. The Vision Fund also participated in subsequent raises, including a $370 million round announced in July that valued the brokerage at $6.4 billion. At the time, the company said it would use the money to continue building a software platform to streamline the process of buying and selling homes. Compass, led by former Goldman Sachs Group Inc. banker Robert Reffkin, has used that capital to acquire competing brokerages and build technology intended to help agents stand out from its rivals.Representatives for Compass and the Vision Fund declined to comment.(Updates with plans for money raised in sixth paragraph. A previous version of this story added the dropped word million.)To contact the reporter on this story: Patrick Clark in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Craig Giammona at email@example.com, Christine MaurusFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The Japanese conglomerate has been ravaged in recent months by a toxic brew of bad investments and terrible press. LightShed Partners lays out the bull and bear cases.
(Bloomberg) -- WeWork’s bankers are pitching investors on what would be one of the riskiest junk-debt offerings in recent years, sending the company’s existing bonds into freefall.A roughly $5 billion financing package led by JPMorgan Chase & Co. is the company’s preferred option, rather than selling a controlling stake in itself to SoftBank Group Corp., according to people with knowledge of the matter. The structure and terms under discussion may change depending on investor appetite. Notably, the financing may include at least $2 billion of unsecured payment-in-kind notes with an unusually hefty 15% coupon, one person said. The deal may give the venture’s top private shareholders a final chance to avoid having their stakes severely diluted.That proposed yield -- nearly double what WeWork paid on its debut bond offering last year -- underscores skepticism among debt investors that the company will be able to stem its cash bleed and become profitable anytime soon. It’s a costly option that may however reward investors handsomely in the event of an actual turnaround.WeWork’s existing notes, $669 million of 7.875% bonds due in 2025, fell the most on record Tuesday morning after Bloomberg reported on the potential terms for a new debt package. The junk bonds dropped to a record low of 79 cents on the dollar to yield 13.4%, according to Trace, before retracing a bit to 79.5 cents.WeWork’s leaders hope to turn around the office-sharing venture with emergency borrowing, even if it’s expensive, rather than watching early backers’ equity and influence diminished in a rescue by SoftBank. Top stakeholders include controversial WeWork co-founder Adam Neumann, as well as venture capital giant Benchmark Capital. Their holdings soared in value and then cratered as investors spurned an attempted initial public offering, which was halted last month.“There may be little appetite for a cash-burning business facing other headwinds, even with a bond yield over 10%,” Bloomberg Intelligence analyst Arnold Kakuda said in a report last week.Only JPMorgan Can Fill WeWork’s $47 Billion Hole: Shuli RenJPMorgan’s bankers are discreetly sounding out investors and floating potential terms for the package of debt, which could help the unprofitable startup avoid running out of money as soon as next month. The financing relies on WeWork’s largest shareholder, SoftBank, following through with a plan outlined in a regulatory filing to contribute at least $1.5 billion in funding next year, according to one of the people, who asked not to be named discussing confidential talks.Representatives for WeWork and JPMorgan declined to comment.The board of WeWork parent We Co. is working with investment bank Perella Weinberg Partners LP as the company weighs its financing options, according to people familiar with the matter. A representative for the New York-based investment bank declined to comment.As recently as September, We appeared to be headed toward a rich valuation in its public debut before investors balked over concerns about the venture’s governance and mounting losses. The company ended up ousting Neumann as chief executive officer and postponing the offering. The delay leaves WeWork without a crucial source of funding: a $6 billion loan contingent on a successful IPO.The financing plan JPMorgan is developing could give the company some breathing room.The $2 billion of proposed unsecured debt may carry an additional sweetener for investors: equity warrants designed so that investors could boost their return to around 30% if the company gets to a $20 billion valuation, according to the person who described the structure. WeWork would pay only a third of the coupon in cash, while the rest of the interest would accumulate and become due at maturity, the person said.The financing package may also include around $1 billion of secured debt that would be sold to investors, as well as about $1.7 billion in letters of credit that would be split among participating banks, according to the people.JPMorgan’s assistance reflects the combination of financial and reputational interests as well as CEO Jamie Dimon’s mantra that the bank “be there in good times and bad” for its clients. The bank already is the lead lender on WeWork’s $650 million revolver loan and a major lender to Neumann. Its funds are among WeWork’s largest shareholders.There’s no guarantee the financing package will be completed, as it’s unclear if there’s sufficient demand from banks and debt investors. WeWork has said about 60 financing sources have signed confidentiality agreements as part of the process, indicating JPMorgan and the company are casting a wider net than is typical for such a deal, according to people familiar with the process.But as talks continue, people inside WeWork view a potential sale of a controlling stake to SoftBank as a backup plan, less desirable to employees whose holdings would shrink in such a deal, according to people with knowledge of their thinking. WeWork is expected to make a decision as soon as this week about which option it will proceed with.Since pulling its IPO, the startup’s new leaders have promised to rein in its once lavish spending. The venture has said it’s looking to offload several of the companies it recently acquired, plans to shutter an elementary school located in its corporate headquarters in New York and even put its $60 million corporate jet up for sale.Masayoshi Son, the head of SoftBank, last month tasked Chief Operating Officer Marcelo Claure, a former CEO of Sprint Corp. with cleaning up WeWork, people familiar with the matter said. Claure’s role has not yet been defined, but the people said he would be looking for ways to cut costs and boost revenue.Son, SoftBank Risk Too Much With WeWork Takeover: Tim Culpan(Updates with Perella in ninth paragraph)\--With assistance from Ellen Huet, Sridhar Natarajan, Edwin Chan, Claire Boston, Ed Hammond and Liana Baker.To contact the reporters on this story: Davide Scigliuzzo in New York at firstname.lastname@example.org;Michelle F. Davis in New York at email@example.com;Gillian Tan in New York at firstname.lastname@example.org;Sarah McBride in San Francisco at email@example.comTo contact the editors responsible for this story: Mark Milian at firstname.lastname@example.org, ;Nikolaj Gammeltoft at email@example.com, ;Michael J. Moore at firstname.lastname@example.org, David Scheer, Dan WilchinsFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
WeWork’s bond price has fallen to a record low on a report that it is considering an unconventional form of borrowing—with double-digit interest rates—to stave off a cash shortage that could hit as soon as next month.
SoftBank may sink billions more into WeWork to help shore up the struggling real-estate unicorn. A reasonable person might ask the question: Why would SoftBank want to double down on WeWork?
(Bloomberg) -- JPMorgan Chase & Co. has hundreds of millions of dollars riding on the fate of WeWork across client portfolios and its own books. And then there’s the matter of the bank’s reputation.The biggest U.S. bank is leading discussions about a $5 billion debt package to help the office-sharing company avoid running out of cash as soon as next month. It’s a long way from the celebratory initial public offering the firm thought it’d be leading as a reward for years of investment from the bank and its clients.JPMorgan funds are among We Co.’s largest shareholders, trailing only SoftBank Group Corp., the company’s co-founders and venture capital giant Benchmark Capital. That’s taken the bank’s asset management clients on a wild ride with more than $1 billion of gains erased as We’s valuation peaked and plunged this year. Those stakes give yet another incentive to help turn WeWork around, on top of the hundreds of millions of dollars that JPMorgan has lent to the office-sharing company and co-founder Adam Neumann.The bank’s executives declined to detail its exposure to WeWork or describe the firm’s due diligence on its relationship on an earnings conference call Tuesday, only saying it wasn’t material in the quarter. The topic didn’t come up on the subsequent call with analysts.“I was disappointed there weren’t any comments on WeWork,” Edward Jones analyst Jim Shanahan said in an interview. “It’s been pretty top of mind and it would’ve been helpful if they’d actually detailed what their actual credit exposure is. Something just to give us a little bit of help with regards to this pretty sizable exposure.”The bank’s lead role in the rescue package stands in contrast with Goldman Sachs Group Inc. That firm, which invested its own money in WeWork and was set to lead the IPO with JPMorgan, isn’t involved in the latest lending discussions, people briefed on the matter said.JPMorgan’s stance reflects the combination of financial and reputational interests as well as Jamie Dimon’s mantra that the bank “be there in good times and bad” for its clients. JPMorgan’s chief has also been known to throw around the weight of his firm’s $3 trillion balance sheet to win clients and to get deals across the finish line.The firm indeed used several business lines in the pursuit of WeWork, under the premise that its IPO would not just be lucrative in its own right but one of many deals for an acquisitive landlord and frequent borrower -- as well as a key piece in a flood of SoftBank-backed offerings that could vault the bank’s status in Silicon Valley.Among JPMorgan’s exposures to the company:It’s the lead lender on WeWork’s $650 million revolver loanIt’s a lender, along with UBS Group AG and Credit Suisse Group AG, on a $500 million loan to Neumann backed by WeWork sharesThe bank has made $97.5 million in mortgages and other loans to NeumannIn good times, major investment banks’ ability to grab multiple pieces of an exciting startup’s financial picture is seen as an easy win for all parties. When things go south, it leaves the banks contemplating what represents throwing good money after bad, and the potential ripple effects from walking away -- such as angry asset management customers.JPMorgan funds secured the majority of their stake at valuations below $5 billion, meaning its clients were still up on their investments at the latest ranges being discussed before the IPO was pulled. The bank’s entities owned more than 5% of We Co., according to filings.While JPMorgan has the closest ties to WeWork, the turmoil may be more apparent in other banks’ third-quarter results. Earlier this month, Jefferies Financial Group Inc. said it wrote down the value of its investment in We by $146 million. Goldman Sachs, which reported Tuesday, probably also took a writedown on its stake in WeWork after plans for the IPO collapsed.A JPMorgan spokesman declined to comment.WeWork’s presence as a major lessee of commercial real estate also opens the door for indirect exposure from lending to buildings that are counting on the company as a tenant. JPMorgan is the third-biggest CRE lender among U.S. banks, according to data from Bloomberg Intelligence.One alternative to the JPMorgan-led deal is a bailout that hands control to SoftBank. No one has more at stake than SoftBank, which is already WeWork’s biggest shareholder and has poured billions into the firm.(Updates with comments from executives, analyst starting in 4th paragraph.)\--With assistance from Sridhar Natarajan.To contact the reporter on this story: Michelle F. Davis in New York at email@example.comTo contact the editors responsible for this story: Michael J. Moore at firstname.lastname@example.org, Steve DicksonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Shared office space company WeWork Companies Inc is leaning toward a near $5 billion financing package led by JPMorgan Chase & Co, instead of selling a controlling stake to Japan's SoftBank Group Corp, Bloomberg reported https://bloom.bg/2pl8JmL late on Monday. The debt package may include at least $2 billion of unsecured notes with a 15% coupon, Bloomberg reported.
The debt package may include at least $2 billion of unsecured notes with a 15% coupon, Bloomberg reported. The report said that WeWork preferred the JPMorgan package over a stake sale to SoftBank, which already owns around one-third of the company, because it would not dilute the stakes of top private shareholders.
(Bloomberg) -- Paytm is close to scoring $2 billion of new financing from investors including Jack Ma’s Ant Financial and SoftBank Group Corp., a person familiar with the matter said, describing a mega-deal that will raise the temperature in India’s increasingly heated financial payments arena.Rob Citrone’s Discovery Capital Management is also in discussions to join a funding round that values the country’s top online financial services firm at $16 billion, the person said, asking not to be identified talking about a private deal. The funding will be split evenly between equity and debt and is aimed at helping Paytm fend off an influx of rivals, the person said. Talks are in their final stages but the terms could still change, the person added.If a deal is finalized, Paytm could outstrip fellow high-profile Asian startups such as Grab and Gojek in valuation. Billionaire Paytm founder Vijay Shekhar Sharma is raising capital to protect the startup’s share of a potentially $1 trillion Indian payments market from newer entrants Facebook Inc., Alphabet Inc.’s Google and Walmart Inc.-owned Flipkart’s PhonePe. Over the past year, a string of new apps have made payments increasingly easy, bringing discounts and cash bonuses to young, smartphone-savvy users.Paytm remains the leader for now. The firm has in a decade become India’s biggest digital payments brand, attracting big names in investing from Alibaba co-founder Ma and SoftBank founder Masayoshi Son to Warren Buffett. Sharma got a huge boost in 2016 after India’s government moved to eliminate most of the nation’s paper money in circulation in a bid to curb corruption. His startup, a pioneer in the country’s nascent field, saw tens of millions of consumers and hundreds of thousands of businesses sign up for digital services in a matter of months.“India is a large market,” said Kunal Pande, head of financial services risk consulting at KPMG. “Digital payments adoption is growing quickly, yet there is room for massive growth as users get comfortable transacting digitally. The large business opportunity makes it attractive for both domestic startups and large global players.”Read more: Facebook and Google Chase a New $1 Trillion Payments MarketPaytm, which is also backed by Alibaba Group Holding Ltd., declined to comment in response to emailed questions. Ant had no immediate comment when contacted, while Discovery Capital and SoftBank declined to comment.Sharma is now extending his online empire into e-commerce and banking, even as others encroach on his turf. The Indian payments market remains a chaotic field where the rules are hazy on what players can offer, yet its promise has lured a string of competitors including Indian banks, its postal service and its richest man, Mukesh Ambani.Credit Suisse Group AG now estimates that the Indian digital payments market will touch $1 trillion by 2023 from about $200 billion currently. It’s a market with huge potential: Cash still accounts for 70% of all Indian transactions by value, according to Credit Suisse, and neighboring China is far more advanced with a mobile payments market worth more than $5 trillion.Ant Financial, China’s largest provider of internet financial services and one of Paytm’s earliest backers, has said it will continue investing in mobile-payment providers around the world to boost offshore revenue and buttress itself against rising competition and tighter regulation at home.It’s not clear how much SoftBank would contribute, but the Japanese company is going through a rocky stretch. SoftBank’s shares are down about 30% from their peak this year as investors, unnerved by the WeWork turmoil and Uber Technologies Inc.’s disappointing debut, grow skittish about startup valuations.\--With assistance from Lulu Yilun Chen, Hema Parmar and Vincent Bielski.To contact the reporter on this story: Saritha Rai in Bangalore at email@example.comTo contact the editors responsible for this story: Arijit Ghosh at firstname.lastname@example.org, ;Sarah Wells at email@example.com, Edwin Chan, Vlad SavovFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.