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The beleaguered workshare startup has sold its 23 per cent stake of The Wing to a consortium that includes Alphabet’s venture capital arm and actress Mindy Kaling. The company also recently sold off Teem, its meeting-space technology company. (The Logic, Crunchbase)

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Talking point: The divestment of its non-core assets is indicative of WeWork’s recent humbling. Founded in 2010 in a burst of utopian bonhomie, WeWork sought to reflect the “We decade,” in which “collaboration [was] the future of innovation”—and snapped up like-minded assets in the years since. Yet investors balked at the company’s losses and oddly constructed corporate ladder, resulting in the company’s cancelled IPO attempt last September and subsequent turfing of CEO Adam Neumann. Management now appears to have a less hubristic view: WeWork is nothing more and nothing less than a giant commercial real estate company.

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Originally known for its office supply stores, Staples Canada is rebranding as a “working and learning company” with the launch of its new concept store based in Kirkland, Que. The second location housing this new concept will open in Toronto in January, and will include a co-working space called Staples Studio. (Staples Canada Inc.)

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Talking point: “The way people work and live is changing in profound ways and Staples Canada is adapting to help our customers work, learn and grow,” said CEO David Boone in a press release. Including a co-working space in the Toronto location is strategic and opens the company up to compete with WeWork, which continues to add spaces in the city, and Breather—both of which are seeing great success from the financial obstacles that Toronto’s housing costs place on companies’ search for office space.

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The Japanese investment giant dropped the purchase last week, citing ongoing criminal and civil investigations into the co-working company. A two-member committee of The We Company’s board said the move breached contractual obligations. (Reuters)

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Talking point: The tender offer was part of a rescue plan SoftBank put together in October 2019, after WeWork’s initial public offering collapsed over its financial-reporting issues and large losses. WeWork’s occupancy rates have dropped amid the COVID-19 outbreak, but its core rental business was in trouble even before the outbreak, signing just four new leases in the U.S. in the fourth quarter of last year. The loss of SoftBank’s billions may not significantly affect the company’s prospects—ex-CEO Adam Neumann and other minority shareholders were poised to benefit from the share sale. The company said it still has enough cash on the balance sheet and financial commitments to fund its five-year plan.

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SoftBank said five closing conditions were not met since it signed the deal in October, and raised concerns about the “existence of multiple, new and significant pending criminal and civil investigations.” (Bloomberg, The Information)

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Talking point: In the short term, the person who loses out the most here is WeWork co-founder and ex-CEO Adam Neumann, who was set to make up to US$970 million selling shares to SoftBank and is now threatening to sue. He’s also no longer a billionaire, with his net worth dropping from US$13.5 billion to US$450 million in less than a year. Long-term, though, SoftBank’s reluctance is a major issue for WeWork, which spent US$1.4 billion in the last three months of 2019, nearly all the cash SoftBank gave it in October 2019. WeWork has been keeping most of its co-working spaces open despite COVID-19, but almost no one is in them.

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The co-working-space firm spent US$1.4 billion in the last three months of 2019, nearly all the money SoftBank injected into WeWork in October 2019 as part of an emergency bailout. (Financial Times)

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Talking point: These numbers show WeWork was burning through cash even before it had to close locations due to COVID-19, and prior to last week’s warning from SoftBank that it might not buy US$3 billion of its shares. There is some good news in the year-end numbers. WeWork generated US$3.5 billion in revenue for the year, a 90 per cent year-over-year increase. SoftBank is trying to get its own house in order at the moment. Last weekend, the firm held talks about going private, before pivoting to an up to US$41-billion asset sale. That new money is earmarked for paying off SoftBank’s significant debts, but could in theory also be used to bolster WeWork. Despite that, WeWork is facing a number of other challenges. The U.S. Securities and Exchange Commission, the Justice Department and New York state officials are all looking into its activities.