Goldman Sachs CEO Solomon says the bank's investment in WeWork is still profitable at this time

Goldman Sachs CEO David Solomon says that the bank's stake in WeWork is still profitable, even after the company has incurred a number of valuation cuts and is now facing a rescue crisis.

"It was an investment we made several years ago at a lower valuation … by today's mark, even though it went down from here, we still have profits in the remaining position," Solomon told CNBC's Wilfred Frost on Thursday .

The cooperative aerospace company has undergone a vicious cycle of scrutiny in recent months. Once valued at as high as $ 47 billion, WeWork puts its valuations at $ 1[ads1]5 billion or lower. In the weeks since, co-founder Adam Neumann was removed from the role of CEO of WeWork's board, the company withdrew its IPO papers, and it is now ready to run out of money by the middle of next month. JP Morgan and SoftBank are in discussions about putting together a financing package for WeWork.

"We look at the situation like everyone else, and it will be interesting to see, when they refocus the business, how that business goes on," Solomon said.

Solomon also defended the WeWork model and said "it is a real business underlying it." Asked why Goldman signed off on WeWork's IPO papers, Solomon gave his views on how the company was trying to navigate a conflicts of interest between its due diligence and its incentive to help WeWork make its high valuation debut.

"There are always conflicts of interest to an organization like ours, and we do our best to ensure that we are transparent where those conflicts exist," Solomon said. "I think what's unfortunate about this, and I think it's a bit of an adjustment largely in terms of the IPO process, there's been a lot of focus on growth at all costs."

"I think the stock market is fluctuating and is becoming much more focused again on growth with a path to profitability," Solomon added. "I think, since there has been a focus on growth at all costs, it has been a more flaccid approach than I personally think is appropriate around governance and I think it will be corrected a bit."

Although WeWork now appears to be Solomon largely believes in crisis that the company backed by an IPO was the right result.

"I think at the end of the day the marketing process worked," Solomon said.

Source link

Back to top button

mahjong slot