Hedge fund billionaire Bill Ackman says WeWork has 'high probability of being a zero'
Hedge fund billionaire Bill Ackman has joined the list of investors who think WeWork may be worth nothing.
“I think WeWork has a pretty high probability of being a zero for the equity, as well as for the debt,” Ackman, the founder of the New York-based hedge fund Pershing Square, said in response to a question he received on stage at the Robin Hood investor conference on Tuesday.
He added that he thought the Japanese tech giant SoftBank “should have walked away” from investing in WeWork and that it seemed to be “putting good money after bad.”
SoftBank announced on Oct. 23 that it would provide $5 billion in financing and a tender offer of up to $3 billion for existing shareholders in exchange for an 80 percent stake in WeWork. The deal valued the office-sharing company at $8 billion.
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In late September WeWork pulled its initial public offering amid reports the company was being valued at between $10 billion and $12 billion, well below the $47 billion valuation that SoftBank last invested in January.
Its co-founder and former CEO Adam Neumann saw a specular fall from grace as reports surfaced of overspending amid little corporate governance and erratic behavior, as reported by The Wall Street Journal.
Even so, Neumann is walking away with a $1.7 billion payout, according to reports.