On second thought, SoftBank might not need the extra $3 billion in equity, thanks.

Recently, SoftBank got a few letters in the mail. Normally, the simultaneous receipt of requests for information about the revolutionary-technology-company-cum-commercial-real-estate-subletter you’ve invested $15 billion in—and which is now worth, at best, one-third of that—from the SEC, Justice Department and New York State regulators is an unwelcome coincidence, the sort of thing that might worry a chief executive. But for a newly-chastened CEO like Masa Son, it was actually rather a welcome relief, insofar as he interprets it as meaning he doesn’t have to throw some of that good Sprint money after bad to bail out WeWork’s other shareholders.

A notice sent to WeWork shareholders Tuesday said that SoftBank believes regulatory probes into the startup’s business, including from the Securities and Exchange Commission and Justice Department, give it an out under the deal struck last fall to purchase $3 billion of WeWork shares from existing investors…. The Japanese investment giant didn’t explicitly cancel the deal, and its notice to WeWork could be a negotiating tactic, or a way to delay the investment as markets remain volatile. U.S. stocks have plunged—then risen, only to fall again—on fears of the long-term economic effects of the outbreak.

Unlike the aforementioned letters, this notice is certainly unwelcome to WeWork shareholders, who were undoubtedly looking forward to April 1 as a deliverance from their disastrous investments, and at a far higher valuation than they could reasonably expect now. One of those shareholders is WeWork founder Adam Neumann, currently believed to be laying low in Israel, who was to be the beneficiary of up to one-third of SoftBank’s tender offer, on top of the $185 million consulting fee and $500 million credit facility he’s already enjoyed at Son’s expense. On the other hand, as with Son, this ostensibly bad news could actually be a blessing, an opportunity to make like Jack Dorsey and return triumphant and save the day (until Paul Singer gets involved, anyway).

SoftBank became WeWork’s majority owner and Neumann gave up voting control over as a result of their deal in October, and it was also not clear if this would remain the case should the tender offer collapse.

SoftBank Backs Away From Part of Planned WeWork Bailout [WSJ]
SoftBank lays ground to abandon $3 billion WeWork tender offer: sources [Reuters]