Simple, someone gave them money at that valuation (softbank). It doesn't mean the underlying value exists but it does give them that "valuation"

Obviously - but why did Softbank think it was worth so much more? They were an investor - they knew that the company was a financial black hole.

Probably to inflate the valuation, do a quick IPO of WeWork for 10x the actual value it should have, get their shares sold on high price, and wave to the fools that took the bait and bought an almost worthless stock.

This whole ordeal was the best that could happen for the normal people, basically fell into the hole they themselves dug, because the economists etc. called their bullshit out loud.

If you have not already, these are good reads from one of the critics of the whole scheme:

1. WeWTF - https://www.profgalloway.com/wewtf

2. WeWTF, Part Deux - https://www.profgalloway.com/wewtf-part-deux

People refer to this as the greater fool theory. Softbank never believed that valuation. What they believed was that there was someone dumber than them that they could trick into buying it from them leaving themselves with cash and the other person with the overvalued asset.

In this case it turned out they were the first and final fool and they were left holding their own bag.

And thus they essentially sacammed themselves(or really their investors) out of billions.

You'll also hear this referred to as a pump and dump. Pump up the value of some asset and then dump it on someone else.