WeWork Delays $20 Billion IPO As Valuation Plunges

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The Topline: All eyes are on what WeWork will do next after the New York-based co-working startup on Monday pushed back its plans for a $20 billion initial public offering. 

  • WeWork planned to start promoting the share sale with institutional investors on Monday and to list shares within the following week. Wework told The Guardian it now hoped to complete the share sale by the end of this year.  
  • Investors are reportedly concerned about CEO Adam Neumann’s oversized influence, WeWork’s rising operating losses and the business model, which involves taking out long-term leases on properties to rent short-term office space to customers.
  • Wework was reportedly seeking to raise between $3 billion and $4 billion from the listing with the entire company valued at $20 billion. The valuation has plunged from $47 billion in January.
  • SoftBank, one of Wework's key investors, reportedly wanted to delay the listing but Neumann pushed ahead.
  • WeWork lost $1.9 billion last year after making sales of $1.8 billion, according to reports. It loses $2 for every $1 it generates in revenue. 
  • Wework is under pressure to raise new money as costs rise and its cash reserves dwindle. The company had agreed a $6 billion loan package in August but the deal was conditional on Wework raising $3 billion from its IPO.

Key background: Wework's plan to lists its shares have met with an icy reception from investors. The co-working startup faced a tough crowd who has already seen the share price of Uber and Lyft, this year's banner IPOs, fall below their initial listing price, but Wework's S-1 raised serious questions. Moves to overhaul its corporate governance and untangle Neumann's financial control and dealings with the group does not appear to have reassured investors.

 

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Getty

The Topline: All eyes are on what WeWork will do next after the New York-based co-working startup on Monday pushed back its plans for a $20 billion initial public offering. 

  • WeWork planned to start promoting the share sale with institutional investors on Monday and to list shares within the following week. Wework told The Guardian it now hoped to complete the share sale by the end of this year.  
  • Investors are reportedly concerned about CEO Adam Neumann’s oversized influence, WeWork’s rising operating losses and the business model, which involves taking out long-term leases on properties to rent short-term office space to customers.
  • Wework was reportedly seeking to raise between $3 billion and $4 billion from the listing with the entire company valued at $20 billion. The valuation has plunged from $47 billion in January.
  • SoftBank, one of Wework's key investors, reportedly wanted to delay the listing but Neumann pushed ahead.
  • WeWork lost $1.9 billion last year after making sales of $1.8 billion, according to reports. It loses $2 for every $1 it generates in revenue. 
  • Wework is under pressure to raise new money as costs rise and its cash reserves dwindle. The company had agreed a $6 billion loan package in August but the deal was conditional on Wework raising $3 billion from its IPO.

Key background: Wework's plan to lists its shares have met with an icy reception from investors. The co-working startup faced a tough crowd who has already seen the share price of Uber and Lyft, this year's banner IPOs, fall below their initial listing price, but Wework's S-1 raised serious questions. Moves to overhaul its corporate governance and untangle Neumann's financial control and dealings with the group does not appear to have reassured investors.

 

I am a Texas native interning at the Forbes office in London, and have previously been published in London and Austin newspapers. I am an alum of City, University of Lo

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