By Mcenery
Hedge fund activist Paul Singer has a new target in his crosshairs: the massive investment firm behind WeWork’s bungled stock debut.
Singer’s Elliott Management said it’s amassed a $2.5 billion stake in SoftBank, the Tokyo-based private equity firm that famously backed WeWork’s hard-partying CEO Adam Neumann ahead of the office rental company’s IPO flop in September.
In a statement to The Post, an Elliott spokesman said the hedge fund has been “working constructively” with the Japanese investment firm on ways to push up its stock.
“Elliott’s substantial investment in SoftBank Group reflects its strong conviction that the market significantly undervalues SoftBank’s portfolio of assets,” reads the statement. “Elliott has engaged privately with SoftBank’s leadership and is working constructively on solutions to help SoftBank materially and sustainably reduce its discount to intrinsic value.”
But Singer’s hedge fund firm is also notorious for bloody battles with its investment targets, including in 2012, when the firm arranged to have a prized Argentine naval vessel held in an African port as collateral for sovereign debts that had defaulted.
Shares of SoftBank, which also owns investments in Uber, Doordash and Slack, popped close to 10 percent Thursday on news of Singer’s stake, which was first reported by the Wall Street Journal.
Shares of the $96 billion firm have been sagging in the wake of the WeWork saga, which cost SoftBank $4.6 billion. It’s also hurt the reputation of SoftBank’s billionaire founder and CEO, Masayoshi Son, who was a staunch supporter of Neumann. SoftBank reported its first quarterly loss in 14 years in November.
After pumping $10.5 billion into Neumann’s co-working operation and giving it a $47 billion valuation, the money-losing WeWork is now valued at $7.5 billion. The IPO was pulled amid allegations of Neumann’s pot smoking and self-dealing and the company was recently sued for an “entitled, frat-boy culture,” which it has denied.
“This is a worst-case scenario for Masa Son,” said one investment banker who follows SoftBank. “But it might work out great for SoftBank shareholders.”
