Worked with the SB guys briefly and my take on it was that they're willing to stack the chips higher than anyone else. And if gravity gets in the way they'll keep stacking until gravity no longer applies
Despite the mockery and we work drama I reckon their all or nothing strategy is sound. If this project fails it'll probably be concurrent with a SV collapse in which case does it even matter?
If you're gonna take risks that involve catastrophic failure anyway you might as well bet big on upside
> If this project fails it'll probably be concurrent with a SV collapse in which case does it even matter?
If I invest $100 in MSFT and you invest your entire life savings in MSFT when the share price goes down it kind of does matter.
>If you're gonna take risks that involve catastrophic failure anyway you might as well bet big on upside
Or, to put it more reasonably, if you're going to take high risk opportunities do it with a chunk of investment you're able to lose, don't risk your entire company on it - which Softbank seem to do. Does it not concern you that Softbank almost managed to bring their entire business into jeopary because of a single failed investment?
>If I invest $100 in MSFT and you invest your entire life saving
Thats missing the point I'm trying to convey. Try this analogy:
If you owe the back 100 Mil you've got a problem. If you owe the bank a 100 billion the bank has a problem.
The rules shift if you up the stakes enough. Return, time frames, values etc start becoming malleable concepts. You think it's a coincidence that masa talks about 300 year time frames?
Not convinced this will work. But I am convinced he's a step ahead of everyone else in rolling this dice. And if it does work it'll crush everyone else.
>Or, to put it more reasonably
Nothing about this is reasonable. That's why it could work
But they won't owe the bank 100 billion. They're going to owe several totalitarian states 100 billion. They're going to owe money to the guys that chopped up Jamal Khashoggi.
The thing is though, 100 billion is a lot for venture capital, but it's less than 1/10th of the market cap of some of the largest publicly traded companies. That's part of why everyone is so skeptical of Softbank, because the second they come into contact with a liquid market, they have problems.
>Nothing about this is reasonable. That's why it could work
> If you owe the back [sic] 100 Mil you've got a problem. If you owe the bank a 100 billion the bank has a problem.
SoftBank is big, but not big enough to threaten the solvency of the Gulf states. Nobody has an incentive to bail out the Vision Fund apart from Masa. He’s already raiding SoftBank's balance sheet.
The reason the bank line works is banks are highly leveraged. A small hole blows the stack. That gives the $10bn borrower leverage over the trillion-dollar bank. Not so with the Vision Fund, where the prime LPs are lending out of equity and the employees are the ones leveraged.
> If this project fails it'll probably be concurrent with a SV collapse in which case does it even matter?
It certainly matters. SV collapses are not and should not be the end of the world for strong companies - indeed that is how you separate the wheat from the chaff. Many companies came through the tech bubble collapse in 00 just fine and some are still going strong today.
If you're running a company that will be wiped out by the next SV collapse, you're in a fragile position and might want to rethink your strategy.
> The Vision Fund reported an operating loss of $8.9 billion in October related to WeWork and Uber. The losses are especially concerning because of the financial structure of the fund, 40% of which takes the form of preferred stock that promises investors 7% per year. That interest works out to as much as $2.8 billion annually.
I'm not a believer of the Vision Fund (but it's just a subjective opinion - I'm a pessimist).
> When SoftBank announced that it expected to raise more than $100 billion for Vision Fund 2 in July, the firm touted corporate backers Microsoft, Amazon, Foxconn and several financial institutions. But it only mentioned one sovereign wealth fund, from the government of Kazakhstan, which has roughly $60 billion in assets - a far cry from the hundreds of billions controlled by PIF and Mubadala.
I watched a few documentaries about Kazakhstan last year (for no particular reason - I was just randomly watching TV) and (technically) it seems to be a nice country which has a nice mix of many climates (deserts, mountains, plains - https://en.wikipedia.org/wiki/Kazakhstan ) and has as well many natural resources (oil, gas, uranium, metals) and is currently trying very hard to develop.
I remember that at that time I mentally wished them well, but when I read now about their involvement in the Vision Fund I immediately thought "hopefully they didn't bet too much on it"... .
> I remember that at that time I mentally wished them well, but when I read now about their involvement in the Vision Fund I immediately thought "hopefully they didn't bet too much on it"...
Strange choice indeed. Makes you wonder if Borat Sagdiyev was involved somehow.
Borat wouldn't be able to recognize the Kazakhstan of today. I went on a mini tour of the "Stans", covering Kazakhstan and Uzbekistan. Chinese money has radically transformed Kazakhstan. Their per capita GDP is nearly the same as China and the capital city has world class infrastructure now.
I hope that as well the rest of the country (not only the capital) got/will get some benefits (e.g. infrastructure, government not totally focused only on the capital, etc...)?
> Chinese money has radically transformed Kazakhstan
Was it financed (at least partially) by Cina? I don't remember "Cina" being mentioned in the docs I saw (they were more focused on the nature and/or the people living there being kind-of-ex-russians and/or the resources and/or about the regime).
Softbank is not trying to be your local Savings and Loan. They want to be something entirely different. Maybe that's a good idea, maybe it's a bad idea. But they intend to find out.
So why does anyone think they will throw in the towel so long as they have even 1 backer or yen left?!
The obvious point is that the 'writing big checks' aligns with what detractors have starting pointing is the problem with Softbank. Take the first example given in the article, Paytm - Softbank are already investors in Paytm, so by inflating a new round of funding they can mark up their previous investment as a profit. Not to mention all weird crossed up fact that Softbank were an investor in Alibaba who are the largest share holder of Paytm. It's all a bit like marking your own homework.
This almost seems like the plot of the James Bond story Casino Royale.
Basically, SoftBank has taken the money of some very unsavory characters (people who are literally willing to cut your body into little pieces) promising big gains and has lost a significant chunk of it.
Now, like Le Chiffre, they are desperately trying to gamble big, hoping that they can make up the lost money by high risk strategies.
This doesn't seem to line up with the reality presented in the article at all. I caught the Jamal Khashoggi reference but don't see where the evidence is that suggests this is somehow motivating SoftBank.
>SoftBank is back to its old, bold ways after a brief lull. But to keep up the pace, it will need major new commitments from the world's largest investors.
Indicates that, from the author's perspective, this is largely a return by SoftBank to their old ways.
>Meanwhile, SoftBank has reportedly only closed $2 billion of its second Vision Fund. The two sovereign wealth funds that contributed nearly half of the original Vision Fund—Saudi Arabia's Public Investment Fund and Abu Dhabi's Mubadala Investment Company—have yet to commit to the new fund.
Means that there is a lot of potential money on the table if returns can be made.
None of this implies an underlying fear that someone at SoftBank is going to have their head removed by the Saudis due to bad investing.
Not really. It's a thesis that if you own the top dogs in the most important consumer growth verticals that you will get both economies of scale and own sector growth. He might end up being very wrong, but it's not really more than that.
> Basically, SoftBank has taken the money of some very unsavory characters (people who are literally willing to cut your body into little pieces) promising big gain
So has pretty much every major company and every major industry around the world. The saudis are some of the largest investors in pretty much everything - including the tech world.
> and has lost a significant chunk of it.
They haven't lost anything yet. They have made investments. Whether it pans out will take time. Even WeWork is still an investment. And last I heard, their first vision fund actually grew in value rather than declined.
> hoping that they can make up the lost money by high risk strategies.
It is the world's largest venture capital fund. The entire fund exists to invest in high risk companies. What are you talking about?
The fact that you think "This almost seems like the plot of the James Bond story Casino Royale." should tell you your assumptions and conclusions might require re-evaluating.
If what you said was true, softbank wouldn't have been able to create a second vision fund.
Instead of parroting news ( which hypes clickbait nonsense about things they don't understand ) and then mixing that with hollywood fantasy, why not look at the data, facts and what is really happening.
We Work is not making more money than initially invested. Same can be said for, Uber, Netflix, Twitter, snapchat, etc. Etc. Etc.
So yes... All this money is "unsavory". The whole IT industry is actually filled with "hot air" unsavory money. So what exact data should be looking at?
If I look at it from a Hollywood perspective, the Corp. Scillicon valley it industry is a giant pyramid scheme club for rich people.
Did SoftBank take Saudi money before or after the Saudis had a journalist murdered and cut to pieces in one of their embassies? If before, can’t predict the future. If after, you reap what you sow.
do you think Saudi Arabia brutally butchering political dissidents is an invention of the last few years? Reminder that we're talking about an aboslutist theocracy that employs slave labour and executes people for heresy in the streets with Scimitars
helping that regime in multiplying their resources has been unethical since the dawn of time
You’re not wrong. It’s the continual doubling down that is disappointing. It’s only a human rights violation when it’s not a trading partner apparently.
The lesson for any potential employee is to stay far away from any company funded by SoftBank.
The inflated value may help the CEO get a big payout (like WeWork) or help the company raise lots of capital (like Uber & Paytm).
However, you are probably joining a company with an unrealistic valuation like Uber, WeWork, Wag or Paytm. If you have options, you will always be underwater. If you have RSUs, they may never appreciate.
Japanese central bankers figured out a way of creating money for purposes that are good for society. Like AI, Quantum computing or bio technology and any other hyped up stuff you see on internet.
There were many bad consequences in the past because of money created that way.
With the way SoftBank is giving away money, it looks like “smart credit guidance” is still happening with out any public policy or public awareness.
I am sorry, what is the problem here? Their Vision Fund is for funding risky ventures with the hope one unicorn pays off the cost of all the others and more. Of course they won't stop. The WeWork exercise might have been about testing the waters of hacking people's perception instead of fundamental analysis and they were riding high for quite a while, so it almost worked for them.
WeWork "almost worked" the same way every large bubble or ponzi scheme almost works if you don't count the last day when everything inevitably comes crashing down.
I think it was ultimately an exercise to see if people are lazy enough to pay for convenience and brand. It almost worked for them which says a lot about the state of society. One could argue Uber's business model is not that different either...
It wasn’t even close to working as a business. They lost a fortune and had no path to profitability. It almost worked as a way of extracting dumb money from retail investors.
How did it almost work at extracting dumb money from retail investors? It didn’t even get close to an IPO. They paid a bunch of banks to have some meetings, but as soon as the numbers were disclosed, no one seems to have been fooled.
Hah! Everything is a ponzi scheme while in growth mode in the venture space if it's not profitable. There is most certainly a universe where the We brand isnt stained by greed, goes pubic, loses 15% early, but survives long enough to innovate survival.
The fault was that they killed the big story with Neumanns greed and it cratered confidence of the public markets and press.
Yes, it is now their asset. After they built a stake and gained control.
Even the common takeover trope of relationship building between an insider and the acquirer happened here. All Vision Fund's dealings with WeWork seemed to go directly to Adam Neumann. And to be frank, he seemed to be out of control, he was going manic, and it seems as though this was encouraged by Vision Fund.
Neumann did very well out of the deal. What happened to the other co-founder?
If you view SoftBank as a way for Saudi oil money to move out of the country and into public markets at a ~30% discount it takes on a whole new perspective.
These people are very clever scammers, I started out with an "Oscar Ford" telling that my initial investment of $US250 will be matched by him. Less than one week later after he had manipulated the figures in my account to look like i'm winning he said that if i put in $5000 i will get a contract to the effect of being 30% insured, and because he never looses and invests in small amounts my $5000 will be safe. Plus i could withdraw that money at any time I choose with no issues. A few days later after he had my account reflecting a further $10,000 in winnings, I was encouraged to put another $5000 towards anther investment. This time my money is 100% insured and again i could withdraw at any time. My account got to around $26,000 in about 2 weeks and i needed to withdraw as we had agreed that I needed the $10,000 at a particular date. At this time i stopped hearing from him because he had tried to convince me that making a withdrawal takes away the benefit of insurance etc. I insisted because i needed the money. My account went up again to over $30,000. I started to contact support in order to make my withdrawal. After a while they became very rude, the person i was trying to plead with to give Oscar my message told me that i was giving him attitude. then as i continued to call, Mr Oscar Ford called me back to say he had just came out of an i think 9 hrs meeting and was fired because he had lost a client's $3000,000. It was a total made up story and I knew it. Before the conversation, my account was over $30,000. By the end of the conversation when i checked again it was suddenly down to $1.00.
This is a well laid out scam of a company and my hope here is to help others to not be caught up in their lies like I did.thanks to globalrefundsint dot com for the total recovery of my asset.
When you ask to withdraw then they will make you fill out forms confirming that you give them the money hence there is no argument.
46 comments
[ 4.8 ms ] story [ 108 ms ] threadAlthough, they should be writing checks into the operations of WeWork.
Edit: Oh, Saudi Arabia and UAE sovereign wealth funds have checked out of the next fund.
Softbank. $91million for 20%
Worked with the SB guys briefly and my take on it was that they're willing to stack the chips higher than anyone else. And if gravity gets in the way they'll keep stacking until gravity no longer applies
Despite the mockery and we work drama I reckon their all or nothing strategy is sound. If this project fails it'll probably be concurrent with a SV collapse in which case does it even matter?
If you're gonna take risks that involve catastrophic failure anyway you might as well bet big on upside
If I invest $100 in MSFT and you invest your entire life savings in MSFT when the share price goes down it kind of does matter.
>If you're gonna take risks that involve catastrophic failure anyway you might as well bet big on upside
Or, to put it more reasonably, if you're going to take high risk opportunities do it with a chunk of investment you're able to lose, don't risk your entire company on it - which Softbank seem to do. Does it not concern you that Softbank almost managed to bring their entire business into jeopary because of a single failed investment?
Thats missing the point I'm trying to convey. Try this analogy:
If you owe the back 100 Mil you've got a problem. If you owe the bank a 100 billion the bank has a problem.
The rules shift if you up the stakes enough. Return, time frames, values etc start becoming malleable concepts. You think it's a coincidence that masa talks about 300 year time frames?
Not convinced this will work. But I am convinced he's a step ahead of everyone else in rolling this dice. And if it does work it'll crush everyone else.
>Or, to put it more reasonably
Nothing about this is reasonable. That's why it could work
The thing is though, 100 billion is a lot for venture capital, but it's less than 1/10th of the market cap of some of the largest publicly traded companies. That's part of why everyone is so skeptical of Softbank, because the second they come into contact with a liquid market, they have problems.
>Nothing about this is reasonable. That's why it could work
No. Even if it does work that will not be why.
SoftBank is big, but not big enough to threaten the solvency of the Gulf states. Nobody has an incentive to bail out the Vision Fund apart from Masa. He’s already raiding SoftBank's balance sheet.
The reason the bank line works is banks are highly leveraged. A small hole blows the stack. That gives the $10bn borrower leverage over the trillion-dollar bank. Not so with the Vision Fund, where the prime LPs are lending out of equity and the employees are the ones leveraged.
It certainly matters. SV collapses are not and should not be the end of the world for strong companies - indeed that is how you separate the wheat from the chaff. Many companies came through the tech bubble collapse in 00 just fine and some are still going strong today.
If you're running a company that will be wiped out by the next SV collapse, you're in a fragile position and might want to rethink your strategy.
I'm not a believer of the Vision Fund (but it's just a subjective opinion - I'm a pessimist).
> When SoftBank announced that it expected to raise more than $100 billion for Vision Fund 2 in July, the firm touted corporate backers Microsoft, Amazon, Foxconn and several financial institutions. But it only mentioned one sovereign wealth fund, from the government of Kazakhstan, which has roughly $60 billion in assets - a far cry from the hundreds of billions controlled by PIF and Mubadala.
I watched a few documentaries about Kazakhstan last year (for no particular reason - I was just randomly watching TV) and (technically) it seems to be a nice country which has a nice mix of many climates (deserts, mountains, plains - https://en.wikipedia.org/wiki/Kazakhstan ) and has as well many natural resources (oil, gas, uranium, metals) and is currently trying very hard to develop.
I remember that at that time I mentally wished them well, but when I read now about their involvement in the Vision Fund I immediately thought "hopefully they didn't bet too much on it"... .
Strange choice indeed. Makes you wonder if Borat Sagdiyev was involved somehow.
> Chinese money has radically transformed Kazakhstan
Was it financed (at least partially) by Cina? I don't remember "Cina" being mentioned in the docs I saw (they were more focused on the nature and/or the people living there being kind-of-ex-russians and/or the resources and/or about the regime).
So why does anyone think they will throw in the towel so long as they have even 1 backer or yen left?!
Basically, SoftBank has taken the money of some very unsavory characters (people who are literally willing to cut your body into little pieces) promising big gains and has lost a significant chunk of it.
Now, like Le Chiffre, they are desperately trying to gamble big, hoping that they can make up the lost money by high risk strategies.
>SoftBank is back to its old, bold ways after a brief lull. But to keep up the pace, it will need major new commitments from the world's largest investors.
Indicates that, from the author's perspective, this is largely a return by SoftBank to their old ways.
>Meanwhile, SoftBank has reportedly only closed $2 billion of its second Vision Fund. The two sovereign wealth funds that contributed nearly half of the original Vision Fund—Saudi Arabia's Public Investment Fund and Abu Dhabi's Mubadala Investment Company—have yet to commit to the new fund.
Means that there is a lot of potential money on the table if returns can be made.
None of this implies an underlying fear that someone at SoftBank is going to have their head removed by the Saudis due to bad investing.
Good movie though.
So has pretty much every major company and every major industry around the world. The saudis are some of the largest investors in pretty much everything - including the tech world.
> and has lost a significant chunk of it.
They haven't lost anything yet. They have made investments. Whether it pans out will take time. Even WeWork is still an investment. And last I heard, their first vision fund actually grew in value rather than declined.
> hoping that they can make up the lost money by high risk strategies.
It is the world's largest venture capital fund. The entire fund exists to invest in high risk companies. What are you talking about?
The fact that you think "This almost seems like the plot of the James Bond story Casino Royale." should tell you your assumptions and conclusions might require re-evaluating.
If what you said was true, softbank wouldn't have been able to create a second vision fund.
https://group.softbank/en/corp/news/press/sb/2019/20190726_0...
Instead of parroting news ( which hypes clickbait nonsense about things they don't understand ) and then mixing that with hollywood fantasy, why not look at the data, facts and what is really happening.
We Work is not making more money than initially invested. Same can be said for, Uber, Netflix, Twitter, snapchat, etc. Etc. Etc.
So yes... All this money is "unsavory". The whole IT industry is actually filled with "hot air" unsavory money. So what exact data should be looking at?
If I look at it from a Hollywood perspective, the Corp. Scillicon valley it industry is a giant pyramid scheme club for rich people.
They led a WeWork down round and have realized a loss on their previous WeWork investment. They also realized a loss with Uber, a public company.
helping that regime in multiplying their resources has been unethical since the dawn of time
The inflated value may help the CEO get a big payout (like WeWork) or help the company raise lots of capital (like Uber & Paytm).
However, you are probably joining a company with an unrealistic valuation like Uber, WeWork, Wag or Paytm. If you have options, you will always be underwater. If you have RSUs, they may never appreciate.
Japanese central bankers figured out a way of creating money for purposes that are good for society. Like AI, Quantum computing or bio technology and any other hyped up stuff you see on internet.
There were many bad consequences in the past because of money created that way.
With the way SoftBank is giving away money, it looks like “smart credit guidance” is still happening with out any public policy or public awareness.
The fault was that they killed the big story with Neumanns greed and it cratered confidence of the public markets and press.
And the Vision Fund has not only invested in high risk ventures.https://visionfund.com/portfolio
Vision Fund's "investment" in WeWork is effectively a hostile takeover of a distressed asset. It is one of the most conventional bets they have made.
Even the common takeover trope of relationship building between an insider and the acquirer happened here. All Vision Fund's dealings with WeWork seemed to go directly to Adam Neumann. And to be frank, he seemed to be out of control, he was going manic, and it seems as though this was encouraged by Vision Fund.
Neumann did very well out of the deal. What happened to the other co-founder?