WeWork’s planned initial public offering (IPO) is on the ropes.
The office sharing company is reportedly going to cancel its planned IPO after its estimated valuation plummeted, likely postponing its public listing until later this autumn or early 2020.
SoftBank Group Corp., the rental office company’s biggest investor, had pressed WeWork to put off the stock offering amid doubts about the business. WeWork had planned to begin making its pitch to investors in a roadshow as soon as this week.
In January, SoftBank made its last investment in WeWork, renamed the We Co., at a valuation of $47 billion U.S. The company was more recently expected to be valued at only about $15 billion U.S. in a listing. The decision to delay the IPO will at least temporarily sideline an important source of capital for the money-losing business and could threaten a $6 billion U.S. credit financing that was contingent on a successful public debut.
The delay also adds another sour note to a medley of high-profile but frequently disappointing IPOs this year. The offering was expected to have been the biggest after Uber Technologies Inc.’s $8.1 billion U.S. listing and ahead of Avantor Inc.’s $2.9 billion U.S. IPO and the $2.34 billion U.S. offering by Lyft Inc. Of those three, only Avantor is trading above its IPO price.
WeWork has become an example of the excesses afforded to technology entrepreneurs in the era of so called "unicorns," start-up companies valued at $1 billion U.S. or more. In an effort to keep its IPO on track, WeWork last week took steps to improve its corporate governance.
