Watch CNBC's full interview with WeWork Executive Chairman Marcelo Claure

right now let's get to that big interview we've been talking about all morning long into ross sorkin is standing by with Marcelo Claure a Leandro hey there we are at we looks as headquarters and we are with Marcelo Claure a he is the executive chairman of weworks he is also the CEO of Softbank and this is his first television interview in quite a while since actually I think you took this role and in and in fact I think since you now have a I've gotten this new CEO in place literally just about a week and

a half ago so thank you for being here good to see you again so much to talk about given what's happened with we work and and where it's come and where it's going I think the biggest question on people's minds is how you think you're going to make money doing this you have 10 plus maybe 15 with bit with debt into this company I think it's now valued at something on the order of seven point nine eight billion dollars least on the books at one point people talked about this it's a forty plus billion dollar

valuation company how does this work just walk us through the math okay first we work as a sustainable business we over the course of the last 100 days we've put together a five-year plan that includes basically looking at every single building and I'm putting the financial forecast of every building and the five-year plan is a great plan it comes down to execution and/or let me take a step back and let me tell you how we have Softbank looks at it first it's an enormous market and the commercial real estate business is large secondly we have

a plan that I'll talk to you about it we have a fully funded plan which is quite important you know there's sufficient between debt and equity pretty much the plan is funded and we will have an excess of 25 to 3 billion dollars in excess liquidity and fourth we have a great new leader now when you ask about we work basically our plan calls for us to be profitable by 2021 okay he was a profitable cashflow posted by 2042 and approximately 1 billion dollars of free cash by 2024 so we have a plan and now

it comes down to execution we have we're gonna have our first 1 billion quarter in 2020 and we're gonna have a thousand buildings this year so it's a large business in which scale is a comparative advantage in terms of the valuation how do you get back to the money well you get back into the money by by having a clear plan and start to executing when you look at 2020 it's a huge inflection point pretty much everything is 50% better than last year and then when you get to 2021 you're even a positive well you're

in terms evaluation in terms of multiple one of the big questions for a company like this is does it get a tech valuation does it get some kind of step up in terms of how it's being valued or is it effectively giving a value like every other real estate company this is not a tradition order in real estate is an ownerless and underlying part of our business but this is a combination of technology a combination of amazing buildings with great design as you can see with that with the community around it so this is you

know we can never say this is not a real estate business it has it has a real stake on account well it depends on the growth it depends at the end of the day all businesses are going to be valued on your ability to generate free cash I don't care if you take business a real estate business and when you have a business today with a clear line of sight that will generate over a billion loss of free cash high growth then I believe this would be a business that will provide a substantial return tour

initial investment that's often made okay let me ask you a question this is from your boss master son back in November he said in the case of we work I made a mistake I won't make any excuses it was a very harsh lesson what was the lesson for you what do you think the lesson was for him in terms of the investment in to the extent that you think it went wrong maybe the lack of involvement that we had in the business they complete an open trust to an entrepreneur who didn't good job in terms

of building a scale business we're talking that Adam Newman yes now we are a lot more involved with all of our businesses we have active board members in in all of our businesses so I think that's you know that's what I'm a massive referring to a mistake what we're not saying is that this business is a mistake by no means this is a great business great business if you go this is the only area that hasn't moved to an on demand what business I mean today you can order a desk pretty much from your phone

think about it other ways you can go to an office building they're going to ask you to sign a five-year lease you're gonna have to get a builder a contractor and all that today you can go to your phone you can go to an app you can sign a three month to six months to one year lease so this was the last part of the world in which the only man economy really had it hasn't had an effect and today I mean you can see the growth there's very few business in the world I was

in in there in in this type of a in this type of business where we've grown from two hundred buildings in 2017 at the end of this year we're gonna have over 1,000 building and these are large buildings they house it thousand people so therefore I mean it's a great businesses high-growth or customers love it it has a great brand so I could not be more positive in the future we work you talked to Adam Newman rarely rarely ya know not that much anymore I mean you know Adam Coulson right if he gives us opinion

and what does he think of all this no I think he's very excited he's very excited that they build the business is transitioning from you know a high-growth a to a moral say most discipline business with accountability and with a more mature leadership I know you've been asked this a lot especially by employees in this company but just speak to and I know you've tried to speak to you before the idea of Adam effectively walking away with more than a billion dollars after what felt like a massive failure in terms of the larger valuation this

company during the IPO process okay so let's start by saying that Adam Hassan walked away with over a billion dollars there's a tender ongoing right now in which Adam will have the right to participate as solo shareholders Adam is a large shareholder of the Company he was a founder and as we do a tender to buy shirts from other shareholders he's going to have the same opportunity as any other shareholder but to say that Adam has walked away with the rebellion dollars is totally false do you think you could have cut a different or better

deal so that he at least optically these questions wouldn't exist I mean I think it's easy to go back and say what would it deal be like but we're saying is Softbank expressed an interest in owning a larger part of a softball FA we work on Adam it's a large shareholder so as you do a tender to buy shares he has an option to participate we have no idea how much he plans to sell and that's what people speculate of how much he can put in we walk away with but Adam had not walked away

with a billion dollars you just hired a new CEO comes from the real estate world does that change the culture of we work because and this goes to is this a tech company is this a real estate company is the something else yeah first we hired a leader right a great leader who's probably done one of the most amazing turnaround in the retail industry GDP which as you know he took it from bankruptcy and sold it for tens of billions of dollars to Brookfield that was a transformational leader the company has a great culture and

there was a lot that had to do a lot of innovation in order to transform that retail business it is a very similar play here so we got to get away from the tech is it a fake business the real estate business we work as its own space it's a unique company the sauce of something that that elevates it be to the extent that it's not a real estate business there was the sort of special cultural sauce that was layered on top that actually created that excitement and to the extent it created a higher valuation

know the excitement doesn't change all you have to do is go to a we work building and when you find the combination of amazing real estate with amazing design with technology and with community that's a special place where we work it is not your traditional real estate that you're renting an empty box and a redesign yourself this is a service company in which you're walking in you walk and you have all the services available for you as a member to focus on doing your job and then let everything else be served by we work long

term you can have more leases you can have other people you're gonna be servicing other people's leases how does how do you think this what do you think this looks like combination of menu I mean first we have a thousand leases there's nobody in the world that has a thousand leases today all over the world in 140 cities you know I think over 37 countries the scale you know you can be if we work member in Boston and then be able to work in hundred forty cities you wouldn't have less leases over time not necessarily

we got it we got to make sure that we on board these buildings that the 1,000 buildings that we have are profitable are doing a good job and then we're going to continue to grow in different facets we might do more management deals we're talking about potentially doing franchising and we're going to continue to open new building in great series the same type of business that we have but the sustainable business is solid it is a business that generates cash and it's a business profitable coronavirus you have a number actually I think 100 different we

works in China what's happening right now well we are being first wanted to make sure that no members and no employees are infected and that's great that's a great win we've been following the guidelines for the Chinese government we have lost we have temporarily closed a hundred buildings that were monitoring and working with the Chinese government to make sure that we're following the appropriate guidelines so that's contained for us but obviously an area of concern I mean having a hundred buildings closed with members not having access to and just working with emergency personnel it's an

issue when asked but Softbank sure and specifically the second vision fund there have been reports that it has been very hard to raise new money for that fund and that instead of a hundred eight billion dollar fund it might come in at half of that and that a majority of that money is ultimately gonna be self bank money not outside investor money what can you say about the state of that fundraising effort so one is too early right I mean a you got to put things in perspective we just finished wishing for one that was

a hundred billion dollars two years I've never been done so now as this phone starts to finish then we're looking at how we're gonna do ambition phone to obviously performance is key and envision fund one performance once you start getting away from the media and the craziness and all that you know the phone is performing well you know we've had a lot of complaints about over well over is up I think eighteen percent from what we invested but complaints against we work we feel very good that we have a great plan for we work so

I think I've seen as things start to come down and you start seeing that uber was a good investment right sharing has an incredible amount of potential that we work as a plant and we stir executing Porter recorder you're gonna see that potentially you know the additional vision fund you know are going to come along but not you know we're long-term thinkers and when we launched the first hundred billion dollar fund he was supposed to blast five years so we've accelerated this strategy is shifting you think there's a major strategy shift in terms of Softbank

and mouse's own thinking in terms of growth at any cost for just trying to get to profitability much quicker and what that ultimately means and also means by the way about the sort of outside valuations that I think he's thought about is a long term investor I don't think it's never been growth for any cost I think that's a misconception you know we like accelerate growth we like companies I can take you know a lot of market sure and we like companies that have a clear path to profitability and cash flow just like any other

investment you got to look at the entire track record of software right there have been conversations over the past couple of months with portfolio companies that have said ok guys I know I know we said put your foot on the foot on the gas but maybe we got to put our foot on the brake right I want to call it the brake I will say you decelerate there are different times but again I mean nothing has changed in terms of we believe that there are certain companies are certain entrepreneurs that have developed unique business models

that you get accelerate the growth happen with Alibaba happens with Yahoo Japan happen with many of our companies what what I think is you know the what I think we're a little confused is everybody's saying oh my god this vision fund a performance is terrible it's not by the way it's great you know you've had eight IPOs you've the value that has been generated half worries realize most of the funds the values is still on paper we've returned money for LPS and at the same time the two big criticism of the vision fund has been

what uber but guess what you're following over uber is opera reinvestment and we have a tremendous amount of of of good views on what's going to happen to her and the second was we work and now after 100 days we have a very clear plan on how to take we work to go fill out this idea of paper based valuations because part of the issue frankly with we work was the idea that effectively there was this artificial valuation 47 billion dollars in part because South Bank put money in after its own money and so how

accurate are all of the are all of the marks in the in the soft bank funds oh they're very accurate I mean you have to look at you know phones are going to move up and down in value in many cases the only difference is because we're a publicly traded company we get to report on that I mean most funds don't have the problem they have to report on a quarterly basis on what is happening to their to their markups and all that I think we are conservative today I think you know every valuation is

done by independent third party by one of the big five and they're based on the traditional methodology in which you value companies in future doing discounted cash flow and others so I don't think it's a fair way to look at it of course they're going to be some investments that are great and some that are not so great but again I go back and I say focus on what has been the criticism uber and we work those have been the two that everybody has talked about and we feel incredible comfortable or both Paul singer Elliott

Management longtime activist he's gotten into a lot of companies over the years and he's pushed people around what is the relationship like now between Elliott and South Bank now that he has a stake in that company and is calling for changes start I mean we have our own activists it's called masa who's continuously looking for ways to make this business better and we since we said since day one you know any shareholder that has views we're always gonna listen we know masa is a pretty open person the management team of Softbank is open and we're

always going to listen to suggestion because we're all in the same you know we're on the same boat we all want to make sure that we can generate a better hold our backs and and financial engineering things that masa wants to wants to pursue I think it depends I mean if you go back last year we did a large stock right back and it's not interfering although to his idea but making long-term investments I think it depends on the situation by no means are we saying we're going to do something or not there's a new

shareholder who basically has some views we will take his views we will discuss their views and we will like we do it with any other shareholder final question on Sprint you have you wear multiple hats the Sprint t-mobile deal we're still waiting on the judge when do you think we're getting here so it's been two years and first ish thank you to all my employees at a sprint for their incredible resilience through this time it's up to the judge right now he has all he needs to make a decision we expect the decision to come

any time but there again he can take his time so we hope in the next couple of weeks a few weeks we're going to have a decision I'm based on the merits of the merger nothing has changed we believe that it's the best for us for consumers and for competition okay Marcelo Claure thank you for joining us as well thank you which is great to see you you you