Alright, financial savants, strap in and let's dive deep. I've got a little theory brewing, and it's one that has some historical precedence if we glance back to the Porsche-Volkswagen saga of the 2000s. So here’s the rundown:
The Evidence: As of June 30, SoftBank owns a mammoth 69% of WeWork's outstanding shares. With 13G filings coming out in a mere three weeks, don't be shocked if that number has ascended to somewhere between 75%-85%.
The Strategy: What's SoftBank’s play here? Could they be quietly accumulating shares, reducing the free float, and setting the stage for a monumental short squeeze? It’s no secret that WeWork has its fair share of critics, and a significant short interest could be the powder keg waiting for a spark.
The Volkswagen Parallel: Cast your minds back to the 2000s. Porsche made a stealthy move, secretly accumulating shares and cash-settled options of Volkswagen. By the time the markets caught wind, Porsche was in control of nearly 74.1% of VW's voting shares. What followed? One of the most legendary short squeezes in history, with VW's share price skyrocketing, and for a brief moment, becoming the world’s most valuable company.
SoftBank's Reputation Play: It's vital to consider the broader implications for SoftBank. Letting WeWork fall into bankruptcy wouldn't just be a financial hit; it would be a colossal stain on their reputation. After all the high-profile investments and vision for the future, a WeWork bankruptcy would be a stark contradiction to SoftBank's ethos.
Opportunity in the Squeeze?: Should WeWork experience a squeeze, it presents an intriguing scenario. The company could leverage this bullish sentiment by announcing an 'at-the-money' share offering. Such a move would flood WeWork with much-needed liquidity, potentially giving it the lifeline required to continue operations and drive growth.
What's Different This Time?: Now, there are obvious differences. SoftBank's intent with WeWork is likely more in line with a long-term vision rather than a quick financial play. However, the mechanics of reducing available shares while potentially having a significant short interest are eerily similar.
Closing Thoughts: Keep a hawk's eye on those 13G filings. If SoftBank's stake inches closer to that 85% mark, and if there's a hefty short interest, brace yourselves. We could be in for a wild financial roller coaster reminiscent of the Porsche-VW saga.
Remember, it's all speculation until the facts come out. But isn’t that what makes the game exciting?
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