'We suspect SoftBank will have the last laugh when they bring the company back to market in a few years – bigger and profitable,' the analyst said.
Chris Lane, senior research analyst at AB Bernstein, said SoftBank will have the "last laugh" when it brings the company back to market in a few years.SoftBank recorded a $3.4 billion writedown on its WeWork investment about two weeks after taking 80% control of the company with a new $5 billion financing package.
"Despite the huge embarrassment WeWork has been for SoftBank this year, we suspect SoftBank will have the last laugh when they bring the company back to market in a few years – bigger and profitable," Chris Lane, senior research analyst at AB Bernstein, said in a note on Friday.in September after investors balked at its mounting losses and unusual corporate governance structure.
Still, Lane of Bernstein believes WeWork could still be disruptive to the existing real-estate market so long as SoftBank restructures WeWork's business plan. The analyst compared WeWork's model to Starbuck's where the profitability comes from big scale. "We think investor should think of the basic business similar as being similar to Starbucks," Lane said. "While profitable, the scale of profits that can be generated from single site is small. Starbucks as a corporation only makes sense if you plan to open thousands of outlets."taking 80% control"We think the investment will ultimately prove to be value-creating," Lane said.
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