Recent reports have revealed that SoftBank has won approval from WeWork’s board to take a controlling stake in the coworking company, giving Adam Neumann $1.7 billion to walk away from the startup he founded.
This deal will value the once beloved coworking giant at a measly $8 billion — a huge cut from its original $47 billion valuation earlier this year.
So how did a company with a ludacris business model manage to receive such a large valuation in the first place? Was it just another part of a massive scam? Surly SoftBank had an idea of how WeWork would look to the public due to Neumann’s questionable practices and the firm’s financial losses.
Even at this $8 billion valuation, WeWork is still valued over 5 times more than its rival IWG, who provides flexible workspaces and actually maintains a profit. It seems that this new seemingly “stingy” valuation could still overvalue the company.