[goatinaboat]

So Softbank will have invested nearly $16Bn (10.5 already + 5 now) in something that even they think is only worth $8Bn? Am I reading this correctly because that makes no sense whatsoever. Except for Neumann who walks away with his $700Mn regardless!

[perlgeek]

If they've already invested $10.5Bn, that money is gone (especially if WeWork fails).

If they truly think they will get $8Bn worth for investing 4-5Bn now, it's a rational choice.

Adding your past investments to the tally is an instance of the sunk cost fallacy.

[mushufasa]

Well, maybe you could think about it like this:

If they don't intervene, they lose all their previous investment guaranteed. So just consider all of that previous investment gone (sunk cost).

If they invest $5b they may make an $8b valuation. And they may still think there is upside beyond that.

Not sure if that's what they really think, but a lot of posters here seem to accuse softbank of sunk cost fallacies without considering that they are surely aware of investing 101.

[goatinaboat]

The sunk cost fallacy has a name because people keep doing it, even knowing what it is