One sign indicates the location of the WeWork office on August 14, 2019 in Chicago, Illinois.
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Without the Softbank rescue deal, space division company WeWork would run out of money by next Friday, sources tell CNBC's David Faber.
WeWork announced Tuesday that Japanese conglomerate SoftBank will provide $ 5 billion in new financing and up to $ 3 billion in an offer to existing shareholders. SoftBank will also accelerate its existing $ 1
Upon completion and after the Bidding, SoftBank's fully diluted economic ownership of WeWork will be approximately 80%.
WeWork also stated that it would appoint SoftBank Chief Operating Officer Marcelo Claure as its CEO, while former WeWork CEO Adam Neumann would become an "observer on board."
The revelation that WeWork has been around a week since the money was spent comes on the heels of bad news for the company since it released its prospectus for an IPO in August. The filing revealed a huge loss of $ 900 million in the first six months of 2019. In addition, it reported at that time that there were long-term leasing liabilities of $ 17.9 billion.
Estimates of the value of the company have declined rapidly since then. What was expected to be one of the hottest $ 47 billion IPOs in 2019 turned into a series of accidents that drove the company's value down to about $ 8 billion.
Co-chairs Artie Minson and Sebastian Gunningham replaced founder Neumann in September after attracting investors because of their unusual leadership style and apparent conflict of interest.
CNBC Faber first announced on Monday that SoftBank would rescue WeWork's parent company, The We Co.
The Wall Street Journal reported on Tuesday that the SoftBank deal would give Neumann $ 1.7 billion in exchange for his agreement to step down as chairman and cast his voting rights.