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Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

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Illustration: Aïda Amer/Axios

SoftBank yesterday threatened to pull the plug on its $3 billion tender offer for shares of WeWork, which was agreed to last fall and scheduled to close on April 1.

What’s happening: The formal message sent to investors is that SoftBank believes several deal conditions may not be satisfied, including the closing of a recapitalization of its Chinese joint venture, anti-trust approvals, and the emergence of a governmental investigation into company finances.

  • The informal message is that SoftBank wants to renegotiate, as a global recession looms and WeWork's "co-working" product appears antithetical to social distancing.

Details: WeWork closed just last month on a $1.75 billion credit facility tied to SoftBank's rescue package, and that money is not affected by the new development. Also not affected is SoftBank's nearly $200 million payment to former CEO Adam Neumann, in exchange for his board voting rights.

  • WeWork has not closed its co-working sites, even in San Francisco where a shelter-in-place order is in effect. It has, however, ramped up "deep-cleaning" efforts and asked its own corporate employees to work from home, if possible.

SoftBank's tender offer was to all WeWork shareholders, including Neumann, venture capital funds, and employees.

  • Participants could tender up to one-third of their stock at $20 per share.
  • Were Neumann to take full advantage of the offer, he'd net around $970 million.
  • While all vested employees are technically eligible, many later hires came in with strike prices above $20. In other words, it's mostly of value to earlier employees.

Between the lines: SoftBank isn't letting a crisis go to waste, and certainly has fiduciary obligations to its limited partners. And it isn't the only later-stage investor currently seeking to renegotiate existing deal terms.

  • But, but, but: This move is absolutely screwing over those early employees. These are people who may have made financial decisions over the past five months based on SoftBank's signature — and who now risk having the rug pulled out from under them.

Plus, it's also worth remembering, in terms of the government investigations:

  • We have no indication that investigators have actually found any wrongdoing, or if they're just kicking procedural tires in the wake of massive value destruction.
  • SoftBank was no passive player were there actual wrongdoing. It was a very large shareholder, had two board seats, and was very involved with the IPO process.

Neither SoftBank nor WeWork are commenting on the situation.

The bottom line: The coronavirus crisis is showing some of the best of business and humanity, with strangers trying to help one another. It's also showing some of the worst.

Go deeper

Biden confronts mounting humanitarian crisis at the border

Illustration: Eniola Odetunde/Axios. Photo: Pool/Getty Images     

Just over a month into his presidency, President Biden is staring down a mounting crisis at the border that could be just as bad as the ones faced by Barack Obama and Donald Trump, if not worse.

Why it matters: Immigration is an issue that can consume a presidency. It's intensely and poisonously partisan. It's complicated. And the lives and welfare of vulnerable children hang in the balance.

Erica Pandey, author of @Work
2 hours ago - Economy & Business

The rise of vaccine passports

Illustration: Annelise Capossela/Axios

Vaccine passports were touted early in the pandemic as an important piece of the plan to get people back to normal life. Now they’re becoming a reality.

Driving the news: CLEAR, the secure digital identity app that you see in airports around the world, and CommonPass, a health app that lets users securely access vaccination records and COVID test results, have joined forces.

"Vaccine tourism" stretches states' supplies

Illustration: Sarah Grillo/Axios

Americans who are highly motivated to get vaccinated are traveling across state lines after hearing about larger vaccine supplies or loopholes in sign-up systems.

Why it matters: "Vaccine tourism" raises ethical and legal questions, and could worsen the racial socioeconomic and racial inequalities of the pandemic.

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