SoftBank invests $2 billion in WeWork

The Japanese bank puts billions more into the co-working company.

 US money Source: Bloomberg

SoftBank has stepped up its investment in WeWork, the upstart co-working company. The Japanese conglomerate is putting an additional $2 billion into the business. Though the amount is less than the expected $16 billion, it’s still a substantial number. This latest action makes the total venture worth about $10 billion.

Why SoftBank is betting big on WeWork

WeWork is a successful office space provider for businesses in over 25 countries. The company has become so popular that it’s abandoning its old name to become We Company to expand beyond spaces for workers. Chief executive officer, (CEO), Adam Neuman, said the name change is to ‘encompass all aspects of people's lives, in both physical and digital worlds.’ SoftBank has noticed the growth of the corporation and is now betting its investment will create more expansion and eventually profits for WeWork. This latest venture increases the business’ value to $47 billion.

Is WeWork worth billions?

While the office space company has grown to 100 cities, WeWork is not yet profitable. The startup has reported a $723 million loss in 2018. Financial analysts like, Alex Snyder, from investment firm CenterSquare, noted that WeWork has to increase profits soon to avoid being seen as overvalued.

'The valuation is going to take a significant amount of growth to justify it,’ said Snyder.

SoftBank’s Saudi Arabia controversy

SoftBank has been under fire recently for funding WeWork from its Vision Fund, which is backed by the kingdom of Saudi Arabia. The country has been criticised for its role in the murder of journalist Jamal Khashoggi. Many venture capitalists in tech are urging conglomerates like SoftBank not to do business with Saudi Arabia’s controversial prince, Mohammed bin Salman. Investors and even human rights activists will be watching to see how this partnership between SoftBank and WeWork will unfold.

See an opportunity to trade?

Go long or short on more than 15,000 markets with IG.

Spread bet or trade CFDs on our award-winning platform, with low spreads on indices, shares, commodities and more.

Related articles

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
Bid
Offer
Updated
Change
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Bid
Offer
Updated
Change
Bid
Offer
Updated
Change
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Monday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.


For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of spread betting and CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.


This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 81% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.