JPMorgan is going through tough times at the moment. The decision it makes at this point greatly determines whether it survives or not, according to analysts. For quite some time, it has been thinking about getting funds to run its business operations. There have been two options standing in front of it. The business needs to settle for one.
WeWork makes its choice
The challenge has been for WeWork to choose between receiving funds from JPMorgan Chase or accepting the control of SoftBank.
Analysts say the company needed to consider that this bank already had a one-third stake in it. Accepting the deal with SoftBank would also mean betraying some top private shareholders who didn’t want their shares diluted. Reporters have asked both SoftBank and WeWork to give their comments about the matter. However, none was willing to comment.
The turn of events
Back in October, reports showed that WeWork and JPMorgan had reached a new agreement. The two were on the negotiating table and sought to strike a debt deal. This was necessary because concerns were rising among investors who desperately wanted to know the valuation of the company. Asides from that, they also wanted to understand the business model of the company in a much better way.
Sources reveal that by last Sunday, SoftBank had already planned its way forward. Top officials working with the bank had prepared the financing package to be given to the struggling company. This was meant to help it boost its stake at WeWork by a significant margin. Asides from this, it would also end up diluting the influence of Adam Neumann in the company. This official happens to be one of the co-founders of the company.
Some people might think that WeWork is falling off balance from the actions it has been taking lately. For instance, there are reports that the company intends to fire about 2,000 of its employees over the coming week. Also, the cash-strapped office-sharing company made a drastic move last month when it decided to send Neumann packing. A person well conversant with the matter, but who wanted his identity kept anonymous said the official had to go. According to him, Neumann had proven to be unfit for the CEO roles. Anyway, insiders Sebastian Gunningham and Artie Minson have stepped into his shoes to help the company move forward in the meantime.