SoftBank has been forced to buy into the WeWork IPO as the only way to average down its initial losing investment. | Credit: Reuters
Legendary investment firm SoftBank, which was once but a Japanese telecom provider, plans to plow another $750 million into the WeWork IPO, according to a report in The Wall Street Journal. This would be in addition to the $2 billion it invested earlier.
This looks like a classic case of SoftBank averaging down from its original investment.
The SoftBank Scramble
The original $2 billion investment came during a WeWork fundraising round that valued the company at $47 billion. The WeWork roadshow has proven to be a complete bust, with investors exhibiting tremendous skepticism about the ability of the company to survive for the long term.
As a result, the IPO valuation of the company appears to have plunged to around $12 billion.
If that’s the case, WeWork would have already