SoftBank Requests WeWork to Put IPO on Hold

Marco Green
September 11, 2019

WeWork has also faced questions about its complicated financial ties to founder chief executive, Adam Neumann, who would retain voting control of the company.

SoftBank says its valuation techniques include cash-flow analysis, recent transactions and comparison with peers to underpin its numbers, but Son has won a reputation for intuitive bets and for doubling down on companies which have yet to generate hard results.

According to news reports, WeWork is also in talks with its largest investor SoftBank Group to get more financing so that they can delay the listing.

But the tech conglomerate's reluctance to pump further funds into WeWork means the startup "may have no choice but to push ahead with the IPO at a much lower than anticipated valuation", one of the sources said. Hence, SoftBank chose to force the company to drop its IPO plans.

U.S. real estate company and shared office space firm WeWork might slash the valuation it's seeking as a public company to under $20 billion.

It is the second time in three days that the company has cut its valuation target, after sources said on Thursday last week that its parent, The We Co, was revising it down from US$47 billion to US$20 billion over doubts about its prospects from potential investors.

WeWork planned to do the first round of investors this week to gauge interest in the IPO. WeWork's underwriters are additionally planning to fulfill with traders to debate doable adjustments to make sure a profitable IPO, The Journal mentioned.

WeWork has lost almost $4bn since 2016, even though the firm has witnessed a significant hike in its revenues every year.

In the IPO filing released, WeWork said that if there is a requirement to gain profit, it can slow its expansion.

Worries about its IPO valuation have reflected the mounting losses and concerns about how its business model would survive an economic downturn.

Investors are no longer so keen on the hip landlord of office spaces.

Last week, Mr Neumann returned $5.9bn worth of stock to the firm, which he had controversially received in exchange for his trademark of "We". Showing active participation in the women empowerment motif, We Company has disclosed its plans to introduce a woman to its existing all male board of directors.

Other reports by Click Lancashire

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