Is WeWork Bear Stearns?

A member of the “subprime” tech space?

With price talk crashing 80pct and trending towards zero, SoftBank is rescuing WeWork with a billion dollar loan to keep it alive and see if it can salvage any value

Similarly, in March 2008, JP Morgan “bought” Bear Stearns for $2/share, ring fenced some toxic assets and left them with the Fed, and attempted to scrape whatever had positive going concern value from the carcass

This time, it’s not subprime loans funded by bank deposits and CDO-Squared, it’s magical TAM thinking funded by yield starved institutional and high net worth individuals SoftBank is in the process of separating WeWork into GoodCo and BadCo and will likely try to ipo GoodCo while running off BadCo privately over time It’s heartening to see that while wild excesses and untruths have been allowed to incubate in the VC petri dish, today’s public markets continue to require rational Unit economics and cash flow

There are many incredible tech businesses out there — high gross margins, network effects, high free cash generation This may just be a culling of the subprime techs hashtag#investmentbanking hashtag#magical hashtag#privateequity hashtag#wework