WeWork Pushes Back I.P.O. After Chilly Reception From Investors
WeWork, the office-space giant whose finances and corporate governance have drawn skepticism from some potential investors, has now suggested that it may not go public for another few months.
The company had been expected to hold its initial public offering within weeks. But in a statement released late Monday night, WeWork’s parent, the We Company, said that it anticipated the offering would be completed by the end of the year.
The decision comes after many investors had questioned the valuation of the company. WeWork had been privately valued at $47 billion in January, when SoftBank of Japan made a large investment. But the prospect of going public has focused attention on a business that is deeply unprofitable and will most likely remain so for years.
The We Company has been trying to rescue its public offering in a number of ways. On Friday, the company said it would reduce the power of its co-founder and chief executive, Adam Neumann, amid criticism of the business’s corporate governance.
But it is unclear whether the changes have been enough to draw in potential stock buyers.
We Company executives and advisers had anticipated that its road show — presentations to pitch itself to prospective investors — would start this week, potentially letting it begin trading shares on the Nasdaq as soon as next week.
The We Company is the latest of the so-called unicorns — businesses funded by venture capital firms that are valued at $1 billion or more — to falter. Shares in Uber and Lyft, two other unicorns, dropped significantly after their public offerings this year.
WeWork, the biggest private tenant in Manhattan, leases large amounts of office space and converts it into sleek work areas. Though the company has grown quickly, it remains deeply unprofitable, and is expected to keep losing money for some time. In the first half of this year, it recorded an operating loss of $1.37 billion and spent $1.5 billion in cash.
Analysts and investors have also said that the We Company has not been forthcoming with detail on profits and occupancy that would give them greater insight into how its properties are performing.
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