WeWork’s largest investor, SoftBank, took over the ailing company and ousted co-founder/former chief executive Adam Neumann. WeWork, which ran out of money quickly after failing to go public, attempted to reinvent how office space is sublet, with a technology twist. But Dartmouth’s Tuck School of Business management professor Vijay Govindarajan noted that the startup’s business model “is nothing more than a real estate play.” SoftBank, which has a three-year plan to save WeWork, put top executive Marcelo Claure at the helm.

The New York Times notes, “SoftBank, which had already poured billions into WeWork, will be pouring billions more in hopes of recovering its investment,” despite the fact that the company is not now profitable and may never be so.

SoftBank, which values WeWork at $7 billion, versus the $47 billion it touted in January, will own 80 percent of the company when the deal closes. WeWork’s IPO was canceled when potential investors “balked at the company’s huge losses” and corporate structure that gave Neumann exceptional control.

SoftBank will now “accelerate a $1.5 billion investment into WeWork” originally slated for 2020, purchase up to $3 billion in shares from other WeWork investors (including Neumann) as well as lend money to Neumann and hire him as a consultant. It will also lend up to $5 billion to WeWork. NYT notes that, according to sources, the takeover “will be successful only if WeWork is eventually sold or goes public at a valuation of $15 billion or more.”

Whether SoftBank can actually “turn WeWork into a sustainable business” is now the major challenge. Sources said SoftBank plans to shut down or sell unprofitable divisions and lay off some of its 12,500 employees. It will also likely focus on cities such as New York and London where WeWork is “already doing well” and leave others where it isn’t profitable.

Neumann, who is leaving with a three-year $425 million loan to repay a JPMorgan, Credit Suisse and UBS credit line, could sell about $1 billion in WeWork shares to SoftBank. He will also become a consultant to SoftBank for four years and $185 million. In return, he gives up special shares and is “barred from starting another company or poaching employees from WeWork.”

Vox notes that paying Neumann an estimated $1.7 billion for leaving an imploding company shows, “how badly the investment firm wants Neumann gone and how much of a liability the founder had become.” Neumann’s negotiating power came from his super-voting stock — worth 20 times more than ordinary shares — that SoftBank permitted.

ValueEdge Advisors vice-chair Nell Minow questioned SoftBank’s thinking. “It’s hard to imagine that throwing any additional money into this mess is good for their investors,” he said.

Elsewhere, Vox stated that Claure held an all-employee meeting where he said he didn’t know how many employees would be laid off but promised that they would “leave with dignity.” According to a source, Claure also gave no information on “severance, retention and equity packages.” The Wall Street Journal reports that, according to sources, SoftBank founder Masayoshi Son apologized to WeWork investors, saying he “had put too much faith in Neumann.”