Calculations by Chris Lane, a senior research analyst at Sanford C. Bernstein, finds that in order for SoftBank to profit off its investment into WeWork, the coworking firm would need a $24 billion valuation.
So far, the Japanese conglomerate has directly invested around $7.5 billion into WeWork, not including the planned $1.5 billion investment for next year.
Lane’s report finds that SoftBank would have made $7 billion paper profit had WeWork maintained its original massive $47 billion valuation, which was met with great scrutiny by investors and the public alike.
If WeWork were to go public at $20 billion, SoftBank would have $1.3 billion in losses. That would theoretically be best case scenario, since WeWork’s valuation was slashed to as low at $10 billion before it scrapped its IPO plans for this year.
Now, WeWork’s new co-CEOs Artie Minson and Sebastian Gunningham are looking to cut costs and raise cash to keep the company afloat.