(This is a real event that occurred less than one year ago. Ill provide a video and a long article describing the history of the company and the events that took place.)

SoftBanks $4.7 billion loss on WeWork investment is one of the most recent puzzles that is difficult to be explained by the rational model.

WeWork is a company that provides shared workspace for startups and other small firms. Founded in 2010, it is headquartered in New York City.

One of the biggest investors in WeWork is SoftBanks Vision Fundwhich has a 100 billion dollars under management, making it the worlds largest tech fund.

In January 2019 SoftBank valued WeWork at $47 billion dollars.

Just a few month later WeWork lost almost $40 billion in value, after an attempt to go public backfired.

And Softbank's lost a stunning $4.7 billion (so far) on that single investment.

By using concepts that we have learned in this class can you offer an explanation on this valuation bubble or valuation illusion from behavioral finance point of view.

How can SoftBank's managers, which are considered some of the most sophisticated investors in the world, make such a foolish decision?