WeWork parent said to delay US public float

Business | 17 Sep 2019 10:12 am

WeWork, with its estimated valuation crashing, is likely to postpone its public listing until at least October, according to people familiar with the matter, Bloomberg reports.

No final decision has been made and the timing could still change.

Representatives for New York-based WeWork didn’t respond to a request for comment. SoftBank Group Corp., the rental office company’s biggest investor, had pressed WeWork to put off the stock offering amid doubts about the business, people familiar with the matter said previously.

WeWork had planned to begin making its pitch to investors in a roadshow this week.

In January, SoftBank made its last investment in WeWork, renamed the We Co., at a valuation of US$47 billion. The company was more recently expected to be valued at only about US$15 billion in a listing and perhaps even less, people familiar with the matter have said.

The decision will at least temporarily sideline an important source of capital for the money-losing business and could threaten a US$6 billion credit financing that was contingent on a successful offering.

WeWork’s likely delay was reported earlier by the Wall Street Journal.

WeWork has become an extreme example of the excesses afforded to technology entrepreneurs in the era of unicorns -- start-ups valued at US$1 billion or more.

Adam Neumann, WeWork’s co-founder and chief executive officer, was able to raise billions of dollars at astronomical valuations and spend freely, while retaining effective control over operations through special classes of stock.

In an effort to keep its IPO on track, WeWork last week took steps to limit Neumann’s control of the company after an IPO, as well as other measures to improve its corporate governance.

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