OYO founder Ritesh Agarwal admits the share buyback in 2019 was ‘bad timing’
- While he stands by the buyback, Agarwal has admitted that the timing was bad in a recent interview with Financial Times.
- Agarwal today owns 25-26% of
OYOwhich gives him a net worth of $2.5 billion, making him the youngest billionaire in India.
- Agarwal said that the move was not one that was triggered by
SoftBankbut is his own doing.
While he stands by the buyback, Agarwal has admitted that the timing was bad. If he would have made the move, he would have got more than what he bargained for. “In retrospect it was bad timing. It would have been 25% or 30% cheaper and I would have owned 35% at today’s share price instead of owning 25 or 26%,” Agarwal, the founder of the $10 billion startup, told Financial Times in a recent interview.
Back then, Ritesh Agarwal had 9.43% in the hospitality startup, while SoftBank, the Japanese investment firm, controlled 45.69% of the company.
Agarwal in the interview also said that his current share percentage at OYO gives him a net worth of over $2.5 billion. According to the last report by Hurun Rich List, Agarwal was India’s youngest billionaire with $1.1 billion net worth.
Given the crash in global hospitality post the Covid-19 pandemic, the valuation of shares may be different from estimates prior to that.
SoftBank’s pressure on OYO post WeWork debacle
There has been a lot of speculation about SoftBank chairman Masayoshi Son putting the pressure on OYO to focus on profitability; the push was similar to the one on WeWork. Agarwal’s buyback of shares started in November 2019 two months after Adam Neumann was forced out of WeWork.
However, Ritesh Agarwal has denied that the move was triggered by SoftBank.
AdvertisementSoftBank has been an investor in OYO since a long time now. It was Softbank's investment that led OYO into the Indian unicorn club with a $5 billion valuation in September 2018, a huge jump from the $900 million valuation it had until then.
The Indian hospitality unicorn OYO has been under the scanner after hoteliers complained of non-payment of dues and other issues. OYO is hailed as SoftBank’s hot investment in India and was growing at breakneck speed kicking up dirt along the way. After multiple troubles, critics have been comparing OYO to WeWork.
In the interview, Agarwal said that there are two defined time periods – Before WeWork and After WeWork. “Pre WeWork, all our decisions were iconic. Later it seemed easy to blame us for all we decided,” he said.
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