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Daily briefing - 25 September 2019

If Silicon Valley was a novel, we would be moving into the final scenes where the antihero's hubris finally becomes clear to the other characters, who then have to extricate themselves from the Silicon Valley narrative before it's too late. Indeed, there's a clean story arc that started with Travis Kalanick's 'Uber owns no cars', continued with Cheski's 'Airbnb owns no hotels' and on to Adam Neumann's 'WeWork owns no buildings'. So, the departure this week of WeWork chief executive Adam Neumann was, let's say, predictable. Employees of Softbank, home of the Vision Funds and the 800lb gorilla of tech investment, are speaking quietly to the press about the unusual behaviour of the business where employees are encouraged to take loans to invest in Softbank's funds, which now appeared to be stuffed with steaming piles of rotting Silicon Valley pitch decks.

In the new logic, losing tons of money is actually a good thing, but not all investors or even observers feel the same way about this concept of seizing the market and relentlessly crushing all the competition. What exactly were the investment banks up to? Goldman Sachs was pitching WeWork at a valuation of $61bn to $96bn. JPMorgan was pitching between $46bn and $63bn, while Morgan Stanley was pitching for $43bn to $104bn. But the FT reveals a long and deep relationship between Neumann and Jamie Dimon at JPMorgan. "The WeWork relationship had been seen as critical to JPMorgan's hopes of supplanting Goldman Sachs and Morgan Stanley's dominance in investment banking for technology companies," notes the FT. That didn't really work out. As investors surveyed the wreckage of Uber, they shied away from these valuations, and with an IPO looking more likely to attract between $15bn to $20billion, Masa Son made some swift moves to eject Neumann, who promptly stepped down. WeWork' s promise to put a woman on the board is laughable.

A UK court yesterday ruled that Prime Minister Boris Johnson's suspension of parliament was unlawful, adding further confusion to the UK's efforts to spring clear of Europe. This appears to mean that the UK parliament will re-convene sometime in the next days, and continue a three-year long process of reminding the rest of the world that the UK is too important to have to do things at the behest of Europe. Irish prime minister Leo Varadkar said that the EU needed to see the UK's new offer by next week. "The withdrawal agreement is actually an international treaty," he explained hopefully. "It's not the kind of thing that can be amended or cobbled together late at night at the European council meeting on 17th of October." Boris the Cobbler is hoping otherwise. No single media outlet in the UK or elsewhere is even claiming to understand what is happening.

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