i should say softbank owns its differentake in two parts, one from softbank overall and one from divisionvision fund. they brought in in 2017 and declined to make more investments after that. the hit would really affect the softbank group overall more than division fund. just -- the vision fund. softbank's last investment was at a valuation of $47 billion earlier this year. now the valuation of ipo being discussed is $20 billion. so more than half -- less than half of the price in january. romaine: can you give us more context in happen -- for what happened in 2017? division fund it decided it would not go forward, and we later learned whatever the saudi investment was being orchestrated didn't pan out. why didn't -- why did softbank move forward the way they did? there is one executive named ron fisher who has championed investments into we work. he is not a managing partner at the vision fund. as you pointed out, it was able to block further investments. ron fisher is a big thinker. softbank overall has been strategy around investing in certain sectors. if you think a certain sector is

>> i should say that softbank was a large investor in uber. even then it was only 16%. now we are talking about 29%. that is a huge stake. of,uld say almost unheard so softbank is already dealing with uber's ipo not going well. it is trying to go raise more money for its second vision fund. investment inarge the original vision, so softbank was hoping to be able to point to a big gain here. it looks like that is not going in via black mark on softbank overall. >> you talk about fundraising for the second fun. there was a boards that softbank was lending by percent to employees. any sign that it is a lack of demand? >> didn't catch that. >> a lack of demand for second round on raising for division ii? >> i think this is really hurting as it goes out to try to tout previous success. slack, butoney on those are much smaller investments compared to its investments in we work. >> great breakdown. thank you for joining. the nfl season kicked off thursday night with the green bay packers defeating the chicago bears, but not every i was glued to the r

as i said before, softbank paid a valuation of 47 billion. other investors in private transactions seem to think the company is worth $20 billion. if you look at the history of transactions, putting softbank aside. wework needs this transaction, they need money. but it is reasonable to think it is closer where the ipo prices. >> what do you think softbank does here? >> it feels like a game of chicken. wework was pushing for the ipo, they have been trying to get softbank to effectively buy them out this year. softbank was far down the road, and then backed out because of concerns about it. so i think the ipo goes forward. the fact is that we work is a business that needs access to cash there's $3 billion they want to raise in the ipo another $6 billion roughly in loans and credit linked to a successful ipo it is hard to see, if softbank is not willing to put up $9 billion, hard to see wework backing off. >> at what point do you wonder how much equity softbank has in this, period >> i think it is a question for softbank, are they willing to wri

softbank invested in it at a $47 billion valuation.ow there is talk that the company could be worth less than one third of that in an ipo. for what we should expect from the roadshow, i am joined by sarah and ellen. how much of a scar do we think wework is a relative now for softbank? ellen: i think we are seeing they are more closely tied than expected. they have invested something around $10 billion in the co-working company. we are starting to see how the ipo gets a little shaky, there are effects on softbank's ability to make money going forward. abu dhabi and saudi arabia, which have traditionally been backers of the enormous vision fund, they are starting to get nervous. they are saying, we are not sure that we want to invest the same amount we did in the first fund in the second. we are starting to see, we work is having ripple effects beyond just their own ipo. taylor: you have been writing some great articles about how they have been an enabler. does that show that softbank's demand is not limitless at this point? >> i think t

that is what softbank seems willing to pursue. boosting its investments just one option. it is possible that it may decide against investing altogether. so what are the odds of that happening? are: i would say that they quite low, because softbank is honestly one of the biggest investors in wework. it invested more than $10 billion. one of the criticisms softbank has been the fact that it has the valuations of companies pre-ipo such as wework . softbank went in at a valuation of -- it doubled. whereas wework now estimates to be in the teens of billions of dollars, so soft think would really -- softbank would really want to put its money in so it can backup its initial investment and make a return on it over the long run. paul: all right. tech editor vlad savov in tokyo. thanks very much for joining us there. shery: breaking news at the moment. we are hearing that the u.s. is imposing sanctions on certain chinese companies over transportation of iranian oil. state department with secretary pompeo now saying that this is confirmed f

what was softbank's reaction to this wework ipo? >> that is not something i reported on in my story. that is something jillian talked about. definitely not going to be good. if you invest in a company at $47 billion and a few months later it looks like it is going to be worth $10 billion to $15 billion, that is not a good look. it is especially difficult for softbank right now because it is working to raise a second mass of funds. time to go toeat investors when some of your initial bets have fallen so flat, not only we work, but all companies.g economy ultimately the cost could be significant for softbank. taylor: talk to me more about softbank's reaction to uber, ly ft, assembly bill five, any concern about how that could affect them? >> there is a major concern. some analysts have put the price yft atse to uber and l around 30% for additional payments for health benefits and maternity and paternity leave and the like if they are forced to reclassify their employees. there's questions around the valuation and some of the financial

the founders met with softbank.rk and that help the overvaluation continue. tom: i do not wanting pin you down on the specifics of the math, but i find it bank,rdinary that soft ordering on 58% or 60% that, -- debt, part of their balance sheet, this is the only game in town. his softbank the lender of last resort? giles: ed is more a question of who is behind soft bank? -- it is more of a question of who is behind softbank? comes to making that huge investment, he is the only one to sign. tom: it sounds like it could be a series on hbo or something. giles turner, thank you. -- next hour, tony dwyer and derek halpenny. this is bloomberg. ♪ ♪ tom: this morning, long after midnight amid a "executive fiat," the executive -- the house of commons walks to lords to suspend parliament. the queen speaks in 34 days. this morning marks pause, dollar finds a bid. in cupertino, tim cook will wander out, another phone and round of toys. in tokyo, we company will decide what to do next. "surveillanceerg ," from new york and london

the ceo of softbank has been a big champion of adam newman. no longer.now is well why what's happened? >> is it more about the valuation which just continues to ratchet down? or is it more about adam newman? >> that depends on who you ask so people that i have been speaking over the weekend close to wework, think this is just business to quote the "godfather." in other words, what softbank wants to happen here is for this company not to go public they invested final round at $47 billion. from what it looks like based on the reporting that we and others have done, wework if it does go public won't have a valuation of more than 20 billion or 10 billion. >> if you're m zrasayoshyi son,u have to ratchet it done. >> this would be a huge embarrassment for that and ramifications on their future fundraising. so if you get newman out of the ceo job, you can install your own ceo and have that person not take the company public. adam newman wants to take the company public and has been pushing back against soft bank and the advice of others to do so now for weeks,

wewiork was softbank got in at $47 billion valuation.oks like it could be worth $15 billion or less. how does softbank handle that? that's the big question. carol: you pointed out, or the story points out that he is very up a valuation. will be -- pbs click to write it down -- will he be as quick to write it down? >> there is a lot of leeway in how they account for things. iscould argue that wework just as successful as it has always been. just because investors on wall street are debating the value ahead of an i.p.o., they are still bringing in the same amount of revenue as when we got in. if you want to think about, do people have faith in softbank? carol: i think that's the big issue. you think about softbank's vision fund, a credible amount of money investing in technology. uber was one of their main investments. that valuation has gone down. same thing with wework. you do wonder what fate future investors will have if you are not rethinking the valuation. >> consider that these big investments have been driving the vision fund, they

. >>> alibaba is tanking on that news today is softbank losing its midas touch? we'll look at the implications it could hold for future ipos. >>> and preventing a financial future we'll speak with a retired all pro who's helping rookies avoid making mistakes. dom chu is here with the drama. >> the drama is red across the board. it didn't start off that way we had marginal gains to start the day. we looked like we could close out the week on a high note but those headlines drifting markets to the downside. the dow industrial is off almost a percent. the s&p 500 below the level. the nasdaq off by over 1%. a number of factors why that is important. one of them is this. take a look at the movement in some of the chinese internet-related stocks. one of the etfs that tracks that market is the crane share csi internet etf a lot of the big names there, all of them in this echltdtf you can see from when that announcement came out, this has lost about 5% just intraday reflecting some of that negative sentiment. another reasonposite is pacing , micron cited the china trade

you wondered whether softbank has sit there and tried to protest and said please don't, you're goingforce us to mark down our current investment, some $10 billion they put into the company at higher valuations but it does appear they're fully poised for the ipo and if -- you know if it has to get done at 18 billion or 19 billion, it appears that at this point that the we company is fully ready to take that on perhaps you get down to that level, you find demand and can have a successful initial public offering. >> i think a lot of people out who are watching this are saying, how desperate -- what the heck do they need to do the deal for >> they need -- they need to raise the money, given how much they're spending they have some debt, some could have covenance in their debt as well it is important to them without a doubt. the way the calendar is working it would appear that likely perhaps they're going to start as soon as monday in terms of a road show. typically they go two weeks. not clear if they want to try to cut it short to get ahead of the jewish holiday, rosh thhoshana, the 30t

relationshipthat between wework and softbank may change?> part of the interest in following this story has been trying to track the disagreement internally between softbank, wework, between the companies, the banks, about how to proceed. continuing forward with the ipo despite reservations and hesitations from other parties, because they really need this cash. it is not just the $3 billion or so they are hoping to raise, but it is the $6 billion of additional credit facility to get access to only if they have a successful ipo that raises at least $3 billion. there's a lot at stake for wework to try to make something work, try to see if they can move forward with a plan as had been discussed. changes are a possibility but that is not what they would hope to happen. gauge on how well they think the ipo is doing. thank you for joining me. coming up, our exclusive interview with ibm ceo as she discusses red hat and the future of the company. this is bloomberg. ♪ taylor: ginni rometty started at in 2012,81, became ceo and has overseen a dramatic

what does this mean for softbank?u have been following the news this week, it has been a roller coaster. the latest is that they will not list. we will see how strong their commitment is. the latest valuation figures are i grabbing. -- eye grabbing. softbank's last round of investment valued the company at $47 billion. softbank stands to book a loss. this is only the beginning. the shares have been trading 25% over the price. one reason why softbank might want to delay the inevitable is because they are raising money for vision fun too. two.sion fund [indiscernible] a bit of bad news that came out today was that saudi arabia pis might be in for a lot lower state. so far, the news is not that great for softbank. you very much. our asian technology reporter in tokyo. plan willson's brexit be tested in court today. most senior's judges will rule on his suspension of parliament. the heart of the debate is whether suspending parliament is a matter for the judiciary. nejra: a decision against the prime minister could throw

"the financial times" has said that could be more than $1 billion from softbank.the clock is ticking for softbank as well because we are looking to see whether they are going to have some sort of write down of the stake. guy: what does this mean in terms of the way the business now?tes for regardless of the financing story, regardless of where the ipo is going, what do we know about how this company is going to change tack? clearly a pastor profitability, to get gross margins higher. all of these stories need to get resolved. how is that going to manifest itself in the way that we were up operates -- that wework operates? sonali: we are not going to see this rapid growth we have seen the last couple of years. obviously we have seen them grow a lot slower, which means by the time they hold any sort of ipo, they are going to look like a much different company. let's see also whether the new ceos that are in leadership right now, whether those are the permanent ceos or whether there will be somebody else that comes in to help lead this company into the next phase. th

taylor: talk to me about softbank's role.they changed the vc landscape given the dominant force they are? have they changed the way the private investing market works? >> i think so. the fact they have so much money , and like i said, the willingness to lend it out, not only to wework, but all these unicorn deals. it is just the fact there was so much money being put into their toious funds that they have distribute out to all these deals come so now you get this point like, wait a minute? what is going on? we have these other companies, stocks turning below the ipo prices. some of these other ones, now people are starting to think, well, can this model continue for softbank? can they keep giving this money away? the result is everybody will be happy and everybody gets their money back. the market is saying no. taylor: the public market seemed to be in charge. thank you for joining me. dan, you will stick with me. microchip the global market is not yet in the clear. how global trade tensions are impacting micron's future. tha

next i agree to softbank story is going to be big. thank you for joining us. ack the splash headlines. a delayed ipo. this is a move that could delay one of silicon valley's most anticipated ipos. the company behind nokia says it sold 10 million retro handsets like this one. now it has redone the flip phone also. they unveiled the machine today in berlin. it costs less than $100. love it first like, facebook is launching is dating service in the u.s.. users can combine elements of their facebook and instagram accounts to create a separate dating profile. that's the business flash update. veryi know you're passionate about this. >> no one wants to use that. it makes sense from a business perspective for facebook to link this. is -- you saw the effect on match.com shares. they were down 4.5% today on this announcement. facebook is a very sticky platform and there are a lot of people who are too lazy to go anywhere else. they don't care if grandma is peeping on them. know whetherve to we have a success rate on how beautiful these dates and of being read whether t

what did softbank do?the most at risk, did softbank tell we company what o do and the troops at wework? >> well, it seems that somebody's been given mr. newman some advice. it did appear a few days ago that wework was determined to go ahead with this i.p.o., come what may, despite the fact that its original evaluation hopes had been sorely disappointed. now we hear that this i.p.o. is not going to happen this week or next. instead, sometime before the end of the year. that's to be welcome, i suppose, because it will give everyone in kernings in particular the underwriters, the board, a chance to pause and reflect and think how are we going to get this i.p.o. over the line? of course, when wework does come back to market, it will have to undergo the same rigorous examination again it had by investors. had already offered them governance, but the business model remains challenging. tom: exactly. i don't see how the numbers change and i don't know how you move the margins. the solution to this is fewer shares

paul: sherri mentioned softbank mentioned shery softbank.mean for softbank as it looks to put together a vision fund? david: it is one of the reasons why some people think they may pull the deal entirely because if there is no ipo, and therefore no recent valuation, in a way, softbank is not forced to confront its own investors about what mistakes it may have made. here, we are talking about 15 for the same company. taken ae tank in -- gigantic haircut and they are trying to raise a second fund and that is not good for their image. if they are really in as much charge as they may be, maybe that is an argument why they will pull the offering and promise adam newman either access to capital so we work does not the wonder--wework does not go under. shery: we were supposed to be talking about apple yesterday. iphone 11,about the their new ipad, and so forth. how did you feel about their new product launches? david: i think that they are great. essentially, apple's hardware products are mostly mature businesses, so you are not going to see radica

to be fair, their numbers have and softbank, the vision fund, didn't go all in.ribution'some about going into wework. what does it really mean in , how bigsaudi arabia of a chunk changes that? obviously, he said that he intended to invest $45 billion in division fund 2, which is the amount he pledged division fund 1. everything is fluctuating at the moment. paper games, at the end of the that couldows what be. one thatgroup is the invested because they pressure the vision fund not to do that larger investment. romaine: i am a little confused about the criticism. they pitched themselves as basically a venture fund. if 20% of that comes out profitable, you don't need to worry about the 80%. why is there so much focus solely on wework when they have had other hits? >> i guess it is a dramatic mess. compare that with the valuation on friday, that is less than a third of that number they invested at. maybe investors are not so comfortable and how softbank is going about throwing their money around. maybe they hoped they don't do the same thing in fund 2. joe: maybe so

the pressure on newman according to sources coming from softbank. that's the biggest external investor softbank is represented by ron fisher who joined the board last year it's unclear where other board members stand. the representative from benchmark trk or steve layman who joined the board back in 2012 where do his loyalties lie adam is more powerful than any of them. he can fire the entire board if he chooses if question is how can he best move his company forward and get the cash it needs to continue growing. wework may not be able to grow at the same pace we have seen. >> those are the questions to ask. thanks let's put them to our next guest. people are pointing to your expose about adam neumann's lifestyle. what more have you seen in terms of reaction because we know what kind of character mr. neumann was or is. it shouldn't be that surprising. >> exactly right weworks board members have long known he's this very unusual character, the life of the party, et cetera they decided very recently to act upon that once the magic had worn off with th

if softbank tries to oust newman and wins, does softbank catalyst ceos not replace him?> it is too early to say whether they launch sco search and try to find a candidate. uber did find a ceo who took over and get a lot of supervision to the company. i'm sure they will follow a similar playbook. it is too early to know who that person will be. no ceo search is formally launched. vonnie: thank you for that on we work. i went to get to the united nations general assembly. president trump is arriving. pres. trump: has been for the last two years, but we are doing very well. as far as the meeting is concerned, we will see what happens. >> [indiscernible] and actually really close -- i would like you to visit this charge. pres. trump: later. >> [indiscernible] pres. trump: i don't know what you're saying. >> [indiscernible] how seriously are you taking -- pres. trump: not seriously at all. had one phone call with the president of ukraine. it is just a democrat which i'm. here we go again. they filled with russia and the recession and they filled with everything, and now their

what is the best case scenario for softbank here? what do they see as justifying either the tech valuation she's referring to or just its ability to grow? >> i suppose the best case scenario now is for wework not to go public, to make corporate governance changes being maybe even for there to be a mild recession and wework to come out of it and say this companies works in a recession and you come out and ipo and you have a valuation that is at least healthier than what you're going to get today and in the near term in public markets, which we've heard numbers of 10 billion thrown after all of this if they keep pressing forward with an ipo, it may go even lower than that. there's so much uncertainty around the company on the flip side, the purpose of the vision fund has always been to be the sort of family, to be very friendly to founders, to get them to work together. if this is going to be a fight and adam newman is now pitted against the founder's son, is this going to be something that will affect the vision fund moving forward --

this is a trend ex-softbank.his is a similar trend, companies staying private for longer, including softbank or ex-softbank is an important question to be asking, and whether or not that changes. they're currently raising a second vision fund perhaps we will see that trend continue over time, despite what we might see with wework and the likes. >> and cooperman-made a splash with threats from warren and the stock market did that supersede capital markets or was politics first? >> politics was more front and center than recent years only because you have so many candidates that have come out with policies or plans that are relevant to the financial markets and relevant to these heavy hitters on stage as you mentioned, cooperman talked about elizabeth warren and the potential her election could send the stock market lower. i spoke with josh harris what it means for the private equity business warren has come out with a plan, stop wall street looting act, which essentially means private equity firms and companies th

also seeing softbank falling more than 3%.hat the biggest backers of the softbank group vision fund are reconsidering their commitment. we have heard about saudi arabia's public investment fund. have abu dhabi's find reconsidering their role. plenty more to come on "daybreak: asia." this is bloomberg. ♪ paul: this is "daybreak: asia." i am paul allen in sydney. shery: disruption to oil supplies may underscore the case to go carbon neutral. even as renewable energy resources are getting cheaper, much of the growth in consumption comes from fossil fuels. it's turn to sophie for what to watch as the u.s. and china remain the largest consumers of energy. sophie: for now, china is the biggest user in terms of absolute carbon emissions as it remains the largest consumer of coal. we saw coal consumption that has kept on the government's long-term plan to curb causal fuel emission. even with coal plants being shuttered, it remains a key source of energy for china. the investment in renewables that are seen power for nuclear and clean

softbank bet at a higher price than the market seems willing to bear.will have to say wait and see, but you could buy -- it seems like you could buy into the ipo now and get a better deal. especially since when we dided about uber, their ipo not turn out well. >> on the one hand, softbank is saying we have vision and maybe the markets don't yet, so i'm reluctant to say to definitively. there was skepticism around facebook and things turned around. wework has not even gone public yet, so we are just and the discovery process here. certainly, investors, especially as the market has been very volatile, are nervous about the launch of these companies we have reported on for years. losses almost equal its revenue. it is just startling. i wrote that the losses relative to revenue are pretty stark. us.: thanks for joining still to come, investors, economists, and, yes, the fed, will be laser focused on the august jobs report which comes out friday. we will tell you what to watch out for next. this is bloomberg. ♪ i'm all allen in sydney. shery: i'm shery ahn i

softbank came in with enormous amount of money and wasn't equal to the economic opportunity yet. question is whether the businesses can get on a ground where they become enormously profitable that's always been the bet just the way everyone says they were going to be like steve jobs, everyone wanted to be the apple of or amazon off the question is there might be just individual companies like this look at what's coming on airbnb, interesting to get a look at their growth and bottom line they seek to go public next year, for example. >> our eyes on airbnb obviously. one other example endeavor doesn't fit that scenario. why are they nervous, is there a danger the market will overcorrect? >> they had problematic numbers too, again, it is math math is math so they had some numbers that showed a lot of lack of profitability. there are some businesses that are really interesting but disp disparate, and then of course control. control on the part of its founders those are all the elements of wework, of this one, several others and although you look at peloton which is interesting busine

peloton is not a softbank company, but i look at them, for example.y spent $320 million i believe in the past fiscal year, ended midyear, and lost $200 million. i wonder, for a company that has such great retention, low churn, high customer sat, spending all that money on marketing, that's not what you would have seen maybe 15 years ago, post dot com bust companies were on diets. they were being efficient in a different sort of way. does that have some impact on what we're seeing in ipos today? >> yeah, i think that peloton story is a great story one, i am a user of the product, i love the product, and it is a question of how large can the marketplace be i look at peloton, i think of apple, right they're the apple of that space. and one of the concerns i have with peloton is the android competitor will show up which will be quite capable at a different price point. how does that survive that the second factor you have with peloton is we have all been around awhile, seen a lot of gym equipment turned into a place you can hang your clothes. that's an is

sameer: softbank does nothing --phil: softbank does nothing normally, for starters.t might hurt the vision fund is when you have that kind of negative publicity, you're supposed to be supporting through hell or high water, that might make it hard to attract investment opportunities for the next fund. if i know the person who wants to give me a couple hundred million dollars might badmouth me publicly after just a few weeks of backlash, that might make it really hard. i'm a little bit concerned about the softbank side of things, how they might not be as supportive as they what of been a year ago. neumann.didn't save what does that do to the next entrepreneur who has a great vision, but is not a great business manager? phil: i think it is probably what happened with uber. there will be the installation of a seasoned executive to take a look under the hood, really evaluate which eat tim did -- really evaluate what each team did. what does your team look like in a perfect scenario, and what does it look like now? the difference is probably a couple hundred people, which

the guru behind softbank has been seen as an the guru behind softbank has been seen as an incredibleng hisjudgment mcgrath now people are questioning his judgment and question whether the funds will be forthcoming for his next big plans. he has lots more big plans. very significantly he owns in the uk one of our great technology companies, arm, so i think they will be concerned in the longer term that has table that will be. what do you make of peloton, this virtual but static bike? it's bloated, shares already down 11%? it's another example of one of these companies that has achieved privately these huge valuations, an awful lot of buzz around it, no clear path to profit at the markets are getting much more cynical about them. they have seen uber and lyft when they are thinking, peloton, not social. i would prefer to get on a regular old bike, ithink! thank you. thanks very much, rory. in a moment, we look at the business pages that there is, a quick reminder of how to get in touch. london, singapore, shanghai, new york, your business well covered, on—air, online and on the bbc news

.: breaking news according to sources, softbank bankers are rethinking the role .n the next vision softbankkers rethinking the role and the next vision fund rework. it is a gargantuan fund and some of the biggest backers are from abu dhabi. $15 billion invested and considers pairing the future commitment to below $10 million, according to people who asked not to be identified. it would be a partial trade of two anchor investors that would, getting -- comp gate fundraising. -- complicate fundraising. we are seeing softbank anchors rethinking the role in the next vision fund. neil, we were talking about bragg and boris johnson. and borisout brexit johnson. what do you see as being the headline? feels like we are pushing from one to the next headline. is there a point at which we have some answers to the outstanding questions? brexit, there isn't. it is clear the u.k. prime minister is serious about the 31st of october deadline. in the event of a yield that is achievable if the government can deliver plan a, if plan a doesn't work, there are tremendous complexities in all of the capitals invol

yes, there is a softbank bubble.ll be interesting >> we've got to do this from our home town. >> don't have to sleep under the desk >> get a pillow. >>> coming up, another state declaring a public health emergency and taking steps to get e-cigs off the shelves and juul planning a major restructuring. a story parents don't want to miss >>> we are going back to the future 405 days until presidential elections. this morning's random but interesting thing you've got to hear ♪ as a principal i can tell you this. when one student gets left behind, we all get left behind. this is a problem that affects each and every one of us. together with ibm, we created a whole new kind of school called p-tech. within six years, students can graduate with a high school diploma, a college degree, and a pathway to a competitive job. you know what's going up today? my poster. today, there are more than a hundred thousand p-tech students around the world. it's a game changer. man: can i find an investment firm that has a truly long-term vie

. >> i may argue this is softbank chickens coming home to roost.encourage crazy founders with outlandish ideas, trying to grow like gang busters at all costs in this era. we see it at wework, saw it at uber there's a sense that this concept is hitting a wall of some sort. i don't see how it plays out in a way that's great for the likes of softbank either way if you replace neumann, don't you stick a shiv in the growth story, if you don't, you have to mark down the investment, right? >> i think all these things are happening. certainly every portfolio company in vision fund portfolio that follows this pattern of the visionary founder, these are all going to get scrutinized heavily. there are companies in the softbank vision portfolio that don't follow this pattern. i think of an arm, for example that's not a company, it is tied to the vision, but that's a very different company than an use or wework >> and already public. >> and already public. nvidia is another. softbank has made investments that feel more run of the mill, but you're right, jon. th

kathleen: softbank is the biggest outside shareholder and we work.bout $10 billion into the company. so what is at stake for them? obviously some money. and what is at stake for the executives within softbank who have been so keen on this project? peter: there are a couple different tiers here. they put many billions of dollars into we work, as mentioned. they hold about 29% of the company, which is the biggest stake, even bigger than adam newman's stake. there is challenge on what the money they make on this deal in particular, and that is always a concern. more broadly, the executives at softbank and is division fund half their compensation tied up and how the deals perform. not just this deal but other deals like uber and many other startups they have behind that. moving in the background is an even bigger question. itsbank of course raised first investment fund of $100 billion. they are now trying to collect money for a second that they would like to be even bigger a little, which sounds extreme to everybody. but they need strong performance to d

no, softbank overstepped. they made a mistake.id, they're going to have to take a write-down. this thing isn't going to recover that valuation. brad: next, let's talk about facebook. the doj investigating facebook, in addition to the fdc. if you live in washington and you're not investigating facebook, you have to ask yourself what you're doing there? but we recently reported sheryl sandberg going to washington next month. so, what does this mean for facebook and how they steer out of it? max: don't forget, you have congress. you also have state attorneys general and you have the european union. there are many, many government entities looking at facebook closely. i think when we saw mark zuckerberg testify in congress in the wake of the cambridge analytica thing, he repeatedly brought up the idea that facebook is an american social network and is in competition with china, with chinese social networks, particularly tictoc, which has been growing fast. so i wouldn't be surprised if you see the message from facebook coming out that

so wework would not have had the round that it did at $47 billion if softbank wasn't forcing that a year ago and i'll just make one point if this comes public, it will come at a price where it's going to work for public investors and this is great news if this is the sort of business model you want to invest in as a public investor. it's not great news if you invested in that last round with wework at $47 million. it will take an awful long time to get back to these levels. >> how much, leslie, do you think this has hurt the reputation and the hype around softbank and massa san >> it depends what they ipo at it needs a liquidation event before we can see what the softbank, especially at a $47 billion valuation, as well as the valuation in the 20s that they also invested in. they have kind of this blended valuation. so if it comes below $20 billion, there was this bernstein note that said, yes, they would be underwater if this ipo comes in at a significantly lower valuation than that. it appears it might be, but it all depends on timing and when it would go public in terms of your earlier

what do you make of the fact that this is a softbank play? the pressure in the lot of money behind it. crystal: it is telling the softbank is behind all of the board meeting that will potentially discuss elevating someone else instead umann and the whole soft bank behind it has collapsed -- the whole soft bank behind it has collapsed. -- softbank behind it has collapsed. seeing a change of ceo close to the ipo, uber has a similar play. we have seen that will potentially damper investors' confidence in softbank investment. this.how do you look at is it we works working on its own or a market top or private valuation? michael: think about the worst have had.e excess we it requires the notion of new era thinking, where it is enough to drive a successful company. regardless of what happens with we works, it is great with the overall markets. they immunize investors against companies that are not ready for prime time. euphoriat strike me as or a market top but the public markets are functioning and saying this company is just not ready. we don't w

we wonder if softbank could have played a role in all of this.reports show that masayoshi son does back this plan to remove adam newman. he has been a rate advocate of newman as a visionary figure but it will not be easy even with softbank's backing. given the amount of shares he owes, he has the ability to oust the entire board. the backing of soft rank improves --softbank they have invested $9 billion, they have representation on the board and have considerable influence. it is no surprise's softbank patients is getting -- patience is getting tested. this will be valued at $15 billion or less. shery: thank you so much, joining us from beijing. let's get a quick check on business flash headlines. the company known as china tesla is outpacing his american rival in one area, losing money. it took tesla 15 years to have $5 billion in losses but they have managed it in a four. the shanghai carmaker reports tuesday and will it -- will be expected to have lost more money in the second quarter. they have plunged since the market value hit $12 billion l

he's there every day >> apparently softbank is not -- no longer in favor of mr. neumann, which is shocking he's got his own decisions to make it may come down to a chinese pe firm called money capital and their representative on the board who has yet to decide. >> chinese capital. >> it is not clear that is actually expired so, again, we have the reports from yesterday from others, we can add it is just further in flux frankly and while early this morning mr. neuman was trying to figure out his own future and make his own decisions -- >> lou frankfurt, he's a man of great -- i would say a steady man when he was at tapestries last coach he can't be rolled >> in favor of keeping mr. neuman. >> that's important. when you read articles in the journal about tequila and marijuana, others read those and say, what -- >> we think those who want him out want him out >> those stories are leaked. >> a long -- a big wall street journal story earlier last week about marijuana use on the plane. >> would you dismiss that? >> it is not illegal. >> no, but the implication is that

we have not heard from softbank.would not be totally surprising if softbank comes in to protect their investment and says we are going to put money in it. we should expect more reporting, more news. softbank is definitely one to watch. vonnie: they are also redoing the structure of the leasing business. this means it may not look as attractive in the future, right? letter letter to employees, they said, it's time to look at ourselves as a business, what we want to be in the future. that means we should expect some restructuring, reviewing of their business. that has been a criticism, that they have not been profitable, investors do not like that. hopefully, they can take some time, improve their numbers, and when it comes back next time, they have better performance to perform. zell has said it is like a savings and loan, very long-term leases in favor of short-term, and that it's a very strange structure. if it changes, has anybody presented a new model? >> there is still a question mark. the company has been operat

how do softbank deal with a huge write-down?ichael, do you expect softbank in the broader private markets that have a bid up these valuations to be humbled out all by? recent events? -- by recent events? michael: i think that is like the tulip bubble. i read this brilliant book by brad stone and it talked about the sharing economy, and that made sense to me. if a company through technology can get individuals to share their assets and give their time, then there is a lot of profits being made. in that frenzy, we started classifying companies like wework and pellet gun as tech companies. no, softbank overstepped. they made a mistake. as max said, they are going to have to take a write-down. this thing is not going to recover that valuation. brad: next, let's talk about facebook. the doj investigating facebook, in addition to the fdc. if you live in washington and you are not investigating facebook you have to ask yourself what you are doing there? we recently reported sheryl sandberg going to washington next month. what does this

david: softbank is a big player in this.they see this coming, they must have known about the construction, they must have seen this coming. softbank invested in several previous rounds, so they have worked with newman for a long time. they are also part of the equity investor who helped structure this corporate governance. so they saw this coming, but what they didn't anticipate was how upset investors in the public market would be. they went through the whole of sounding out investors in the market, how likely you would pay the valuation they wanted, $47 billion. david: now they are talking about 115. >> they have been scaling back every time they go to investors. what they did not anticipate is that the corporate governance would come up as an issue. david: is it possible that we are seeing a tectonic shift as far as shareholders willing to tolerate? there have been ipos in the past where they were putting up with corporate governance. this one is different. >> this is different. we have also seen what is unique to a softb

i'm just defining softbank stocks maybe i'm unfairly picking on softbanks. >> right. >> but a small handful of these companies were driven up to high valuations usually with what i'll call structure in the private round, preferences and other things that artificially inflated the price way above what it should be in a public offering. >> so -- >> but in general, not very many of the stocks did that. >> last quick question -- >> this is a small group of stocks, not a whole thing. >> which of the crop that's now coming would you be a buyer of, duncan >> well, there's a couple coming data dog i mean, there's some coming out that look stunning, absolutely stunning i love zoom. there's some zoom-like ipos coming out, more in the b 2b side peloton, not so much. >> even though they have the right target market, the people handling the ipo are kind of their core audience. leslie, finally to you, what are you hear on peloton as that ipo comes closer >> reporter: yeah, so, that -- we saw those executives leave jpmorgan just a little bit ago we have some fresh video of the executives walking out of jp

softbank is reacting to concern about wework's drop in valuation.goldman sachs pitched wework at a $46 billion valuation. now there's talk the company that.be valued at 1/3 of jack ma is ending his reign of alibaba, one of the most spectacular wealth creations the world has ever seen. ats amassed a fortune valued $41.8 billion. alibaba in his apartment. moody's expressing doubt in ford's turnaround plan, changing the rating to junk. ceo jim hackett has been struggling to win over wall street with his restructuring proposals. that is your bloomberg business flash. david: thanks so much. we are listening to mark carney head of the bank of england, here in manhattan, speaking there the former treasury secretary and chairman emeritus of the council on foreign relations. mr. carney is making some headlines about where we are with the global economy and what can be done about it. alix: he said, "a global economic slowdown is underway. there is fiscal space to counter the slowdown." that, to me, is no surprise. of course, you are going to have a central ba