SoftBank's View avoids SEC fine, but is still running low on cash. How it went from investor darling to SPAC disaster.
SoftBank-funded View Inc. has been dogged by regulatory troubles for more than a year and a half. Earlier this week, the California glassmaker settled charges from the Securities and Exchange Commission, but the startup still has a rocky road ahead.
The SEC announced on July 3 that View failed to disclose $28 million in projected costs to fix and replace any defective eco-friendly "smart glass" windows, which are covered under warranty. The agency declined to fine View as the company self-reported the liability understatement, cooperated with the investigation, and "promptly undertook remedial measures."
The SEC order did find that View violated several securities laws pertaining to negligence-based antifraud, internal accounting controls, and other matters. View has not admitted or denied these findings, according to the release, but it has "agreed to cease and desist from future violations of the charged securities laws."
The firm did not respond to Insider's request for comment.
View's former CFO Vidul Prakash, however, is being sued by the SEC, which accuses him of improper book and record keeping, among other matters, according to the release. Prakash, who resigned in November 2021 after View first disclosed it had understated liabilities, did not respond to Insider's request for comment.
But View is not out of the woods yet. Despite raising $200 million in convertible notes last year, the company does not have enough cash to meet forecast operating costs through the third quarter of 2023, according to its most recent quarterly earnings statement. View is "actively seeking additional sources of capital and is currently in discussions with potential investors," per the statement.
The firm's controversial CEO, Rao Mulpuri, has managed to raise cash for View multiple times when the company ran perilously low on cash, including from the now-bankrupt financier Greensill Capital.
"He's always been able to pull a rabbit out of a hat when it comes to procuring more money for the company," one banker familiar with View said.
The company faces delisting from the New York Stock Exchange because its shares have traded below $1 for the past year. View needs shareholders to approve a reverse stock split in July to regain compliance before the NYSE's August deadline.
This is the second time View has been threatened with delisting since going public via SPAC in March 2021. After failing to file numerous financial statements, it regained compliance in late June 2022.
For those looking from the outside, View's troubles came on suddenly after its public debut, but insiders said the company burned cash and struggled with product failures for years. Insider spoke with 27 former employees and two current employees across View's finance, sales, marketing, factory operations, engineering, recruiting, and IT departments.
"When I was informed of the work I would be doing to help with the SPAC, I sort of laughed inside because to me, going public was never real," a former View IT employee told Insider. "We were way closer to going bankrupt."
SUBSCRIBE TO READ THE FULL STORY: SoftBank's View went from investor darling to one of the worst SPAC deals ever. Insiders say the glass maker has struggled with cash burn for years, while many lived in fear of being fired.
Editor's note: This article was first published in June 2022 and has been updated to reflect recent developments.