Presented by the Financial Times

Hi John, here's what you need to know for October 15th in 3:12 minutes.

🌍 Finimized while making sense of a world in flux via the Financial Times.

⏳ Keep it brief

Dispirited Away

What’s Going On Here?

With WeWork at risk of running out of cash next month, Japanese conglomerate SoftBank is considering stepping in to save the co-working company – and its own investment.

What Does This Mean?

The We Company, WeWork’s parent company, had expected to raise upwards of $3 billion at an initial public offering (IPO), and twice that with the extra borrowing power it’d have. But when public investors passed, WeWork suddenly found itself very short on cash.

That’s led WeWork to look elsewhere. It could take out more loans, but that’d be costly: current bond-holders are effectively demanding 11% in interest, so new debt’s unlikely to be cheaper. Or it could turn again to its biggest shareholder. SoftBank owns about a third of WeWork through its $100 billion Vision Fund, and it’s proposed a plan to take an even bigger stake. That’d give it control of WeWork, which it could then try to turn around before eventually selling for a profit.

Why Should I Care?

For markets: Between a rock and a hard place.
If WeWork goes under, SoftBank could lose over $10 billion. That’d sting at the best of times, let alone after a $600 million loss from an Uber investment and a 28% first-day drop in the stock of its high-profile venture, Vir Biotechnology, last week. But a successful WeWork turnaround could be just what the doctor ordered. Perhaps that’s why WeWork’s bond-holders – more confident about its future – drove its bond prices up on Monday.

The bigger picture: Pivot! Pivoooooot!
Funds like SoftBank’s Vision Fund are “venture capital” (VC): they invest in relatively early-stage companies, taking on the risk they’ll fail in the hope of big profits if they succeed. But it’s rare a VC firm steps in to take control of a business. That’s normally reserved for private equity funds, which invest in more mature companies, streamline their costs, and sell them on. SoftBank’s decision to turn the Vision Fund from the former to the latter, then, may raise some eyebrows…

Holy Cow

What’s Going On Here?

French energy giant Total is spending big: on Monday, it announced a $600 million deal to tap into India’s growing gas market.

What Does This Mean?

Total, the world’s sixth-largest oil company, is buying a 37% stake in India’s Adani Gas, which distributes to homes, offices, and factories across the country. Total’s already the world’s second-biggest producer of liquefied natural gas (LNG), but as part of the deal, it’ll supply Adani with three megatons of the stuff.

Total isn’t the only one trying to get in on India’s fast-growing energy market. Earlier this year, Saudi Aramco – the world’s most profitable company – took a $15 billion stake in Reliance Industries’ oil refining unit, while BP formed a joint venture with the latter to produce its own gas, as well as open stations in the region.

Why Should I Care?

The bigger picture: Cleaner consciences.
India gets around half its energy from coal, which isn’t exactly great for the environment. So while energy producers like Total wait for renewable energy like solar and wind to become more affordable, they’re leaning into their shale oil and LNG businesses, in the hope countries like India will switch to those cleaner alternatives. In fact, Total’s betting big on LNG: it’s also investing in Mozambique, France, and the US.

Zooming out: Buy the future.
An even bigger deal took place in Britain: a US private equity firm announced it’d buy cybersecurity company Sophos. The $3 billion deal valued the company 37% higher than public investors did, and shares duly soared on Monday. Sophos’ management will likely be pleased too: they won’t have to worry about share crashes like last November’s anymore. The anticipated growth for the cybersecurity sector might be what caught the American buyer’s eye – but the weak pound, which made Sophos’ stock appear cheaper, probably didn’t hurt.

💬 Quote of the day

– Thuli Madonsela (a South African advocate and Professor of law)