WebProNews

Tag: Marcelo Claure

  • SoftBank Announces Settlement With WeWork Founder Adam Neumann

    SoftBank Announces Settlement With WeWork Founder Adam Neumann

    SoftBank Group Corp. (“SoftBank”) today announced that it has entered into a settlement agreement with the Special Committee of the Board of Directors of WeWork Inc. (formerly referred to as The We Company) (“the Special Committee”) and WeWork’s founder, Adam Neumann. The terms of the settlement are confidential. When completed, the settlement agreement would resolve all claims brought in a lawsuit in the Delaware Court of Chancery, and is in the best interests of all parties.

    “This agreement is the result of all parties coming to the table for the sake of doing what is best for the future of WeWork. SoftBank and WeWork have spent the past year transforming the WeWork business and executing on our plan towards profitability. With this litigation behind us, we are fully focused on our mission to reimagine the workplace and continue to meet the growing demand for flexible space around the world.” — Marcelo Claure, Executive Chairman of WeWork, CEO of SoftBank Group International, and Corporate Officer, Executive Vice President and COO of SoftBank.

    The Wall Street Journal previously outlined the likely settlement:

    WeWork co-founder and former Chief Executive Adam Neumann is set to reap an extra $50 million windfall and other benefits as part of an agreement that would settle a bitter dispute he and other early investors in the shared-office-space provider have waged with SoftBank Group Corp., according to people familiar with the matter.

    As The Wall Street Journal reported earlier this week, the parties are closing in on a deal in which SoftBank, WeWork’s majority shareholder, would buy about $1.5 billion of stock from other investors, including nearly $500 million from Mr. Neumann. That is about half as much as it previously planned to buy.

    But part of the deal not previously reported sets Mr. Neumann apart from other shareholders. It calls for SoftBank to give the 41-year-old the $50 million special payout and extend by five years a $430 million loan it made to him in late 2019, the people said. SoftBank is also slated to pay $50 million for Mr. Neumann’s legal fees. It isn’t clear how much it is paying for the other shareholders’ legal fees.

  • Sprint’s Former CEO Goes Rogue, Says Company Can Survive Without Merger

    Sprint’s Former CEO Goes Rogue, Says Company Can Survive Without Merger

    After testimony from both T-Mobile and Sprint executives claiming the number four carrier cannot survive without the merger with T-Mobile, Sprint’s former CEO Marcelo Claure flipped the script and claimed the company could be viable on its own.

    Bloomberg is reporting that T-Mobile CEO John Legere had previously testified that Sprint’s $40 billion in debt and unfavorable position in the market meant it would be “sold for parts” without a merger. However, when Claure—currently executive chairman of Sprint; COO of Sprint’s parent company, SoftBank Group Corp.; and CEO of SoftBank Group International—took the stand, he had a different outlook.

    “Those are possibilities,” Claure responded. “I don’t necessarily agree completely.”

    Claure did go on to say that without the merger, the road ahead would be a difficult one and likely require Sprint to leave some markets.

    “Sprint two years from now would be a very different from Sprint today, because we would cease to be a national competitor.” Claure added. He also indicated the carrier would likely have to borrow additional money and raise prices.

    Similarly, current CEO Michel Combes testified that without the deal, Sprint would have to pull back from some markets, although it would still cover three quarters of the U.S. population.

    Given that opponents of the merger do not want to see the U.S. wireless market go from four national carriers to three, Claure and Combes testimony may still help the case for the merger. In effect, both executives are implying that Sprint will cease being a national carrier and join the ranks of a regional carrier should the merger fail.

    In addition, as part of the deal, T-Mobile and Sprint would sell off wireless assets to Dish Network to help it become a new fourth carrier. Dish’s CEO Charlie Ergen testified that his company would be ready to compete with the other carriers “from day one,” once the deal is finalized and it acquires the assets involved.


    Ultimately, the court may decide that the market would be better served by Dish Network acting as the fourth carrier, rather than a crippled Sprint.

  • Sprint Executive Expected Merger to Raise Prices, Undercutting T-Mobile Argument

    Sprint Executive Expected Merger to Raise Prices, Undercutting T-Mobile Argument

    As the trial to stop the T-Mobile/Sprint merger got underway today, Bloomberg is reporting that at least one Sprint executive suspected the merger would result in higher prices for consumers.

    As a coalition of 13 states and the District of Columbia try to prevent the two wireless companies from merging, T-Mobile has maintained that the merger will ultimately benefit customers. Part of the rationale is that T-Mobile and Sprint need to combine to have the size and resources necessary to compete with Verizon and AT&T. Without the merger, the two smaller companies have indicated they would not be able to compete as effectively in the 5G market, leaving Verizon and AT&T little competition or incentive to keep prices low.

    The states, on the other hand, have said that going from four major carriers to three would eliminate competition, resulting in higher prices. According to documents that have come to light on the first day of the trial, it seems that a Sprint executive agreed with that sentiment.

    “Roger Sole, Sprint’s chief marketing officer, said in a text message in 2017 to Marcelo Claure, the carrier’s chief executive officer at the time, that the deal could mean an increase of $5 a month in average revenue per subscriber. Industry leaders AT&T Inc. and Verizon Communications Inc. would also benefit with fewer players in the market, he said.”

    We’ve already reported on the stakes in this trial, impacting how much states have a say in antitrust matters the federal government is not interested in pursuing. If more documents or testimony comes to light supporting Sole’s belief, the states may be able to make their case after all.