Neumann's payday
The deal’s done. Yesterday we spoke about how a burning pile of cash had to pick one of two lifelines, and it’s certain today that SoftBank will be taking control of WeWork. The expected value of the final value is somewhere in the ballpark of $8 billion, a major cut from the last round of funding We closed with SoftBank at a $47 billion valuation.SoftBank plans to offer $5 billion in new financing and $3 billion in a tender offer to shareholders.
Not just that, but SoftBank has injected over $15 billion worth of cash for a company that is now valued at $8 billion. There is, however, one winner in this knife fight - Adam Neumann. Yes, the former CEO and current chairman of the firm who will receive $180 million from SoftBank in “consulting fees”, and will be selling his personal, private stock well worth over $1 billion to SoftBank. In exchange, he will be stepping down as Chairman altogether. Also, let’s not forget that this is the same guy who bought the name “The We Company” from himself while he was running the company for $6 million.
This entire ordeal has eroded credibility for not just fast-growing startups, but also the international IPO market that is witnessing firsthand what an actual SNAFU looks like. It’s only a matter of time before Harvard Business School creates a “case” with lessons to be learned for the years to come.
Adam Neumann will now just be a board observer.
Biogen: hope can set a stock free
This was perhaps one of the biggest movers in the market today, as the stock rose over 40% pre-market, reversed during the day, but still closed 26.11% higher at $281.87.
Why? you ask, well, it turns out that the firm plans to seek regulatory approval next year for its Alzheimer’s drug that it once considered to be a lost cause and pulled the experiment when it saw disappointing results. Turns out that the firm had not taken a closer look at the data from the study it conducted back in March, and the same findings, albeit a better interpretation, reveal that the drug did work in patients who received a high dose.
It’s interesting to see how much the very possibility of something has the potential to have such major market-moving impact. No FDA official has made a comment yet because of confidentiality concerns, but to me, this is somewhat beautiful. There’s a drug out there that can potentially work. We don’t know if it works. We won’t know if it ever will for at least some time. But, there’s this company that believes to have found something and has gone to the FDA to request a shot at success, and we want it to succeed. I’m not saying big-pharma is all sunshine and roses, but I am saying that it is big-pharma’s aggressive expenditure on drugs that will bring us closer to a cure
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